A Season of Change in the Property Market
Summer 2025 brought a mix of resilience and adjustment for the housing market. After a quieter spring, activity began to pick up again, with house price growth remaining modest but positive. Nationally, values were only 1–3% higher year-on-year by mid-summer, but crucially, buyers now had more choice. More homes came to market, and sellers had to remain realistic on pricing to secure interest.
July proved particularly strong, with the busiest month for sales since 2020. Transactions were well above last year’s levels, showing that when homes are priced right, buyers are still out in force.
Newcastle, Gateshead & Northumberland: Local Market Highlights
Here in the North East, the picture varied across the region:
- Newcastle upon Tyne: Average prices climbed to around £202,000, up over 8% year-on-year – one of the strongest growth rates in the country.
- Northumberland: Values reached roughly £196,000, up around 5% year-on-year.
- Gateshead: Prices held steady at around £149,000, with only a modest 1–2% annual rise.
This divergence shows the local nuances at play. Newcastle surged ahead thanks to strong demand and limited supply in sought-after areas, Northumberland enjoyed steady growth, while Gateshead reflected a more balanced, stable market.
Importantly, the North East continues to outperform most other regions in terms of growth, helped by affordability compared to the South. With lower average house prices, buyers here have been less stretched by higher mortgage rates, supporting ongoing demand.
Supply & Demand: More Choice, Steady Sales
One of the defining features of this summer has been rising housing supply. More “For Sale” boards appeared, giving buyers greater choice and reducing the likelihood of bidding wars. Overpriced homes have struggled, while well-priced properties have often gone under offer in record time.
Demand, meanwhile, has held up well. Buyer enquiries and agreed sales were both higher than last summer, showing that confidence remains. In many parts of the North East, correctly priced homes were selling in under a month – quicker than the UK average.
The market now feels more balanced: buyers are being selective and negotiating harder, while sellers need to align expectations with today’s conditions. The upside is that this dynamic has kept transactions moving, without runaway prices.
Mortgages & The Economic Backdrop
The financing landscape has shifted noticeably this year. While mortgage rates remain higher than the ultra-low levels of a few years ago, borrowers have started to feel some relief. The Bank of England has made a series of rate cuts through 2025, easing the base rate down from the peaks of 2023–24. Lenders have followed suit, with five-year fixed deals that were well above 5% now closer to 4.3% on average.
This steady improvement has boosted confidence. Wage growth has been outpacing house price growth, slowly restoring affordability for many households. Here in the North East, where average prices are lower than in much of the country, the impact of those higher rates has been less severe, keeping buyer demand resilient even as conditions normalise.
Sentiment and Seasonal Trends
Overall sentiment this summer has been one of cautious optimism. Buyers welcomed the extra choice and more negotiating power, while sellers adapted to a calmer, more measured market. July was unusually busy, but August slowed, as it always does, with holidays taking priority.
Well-presented homes with realistic asking prices still attracted plenty of attention, with outdoor space and lifestyle features proving especially popular during the warmer months.
Looking Ahead: September and Beyond
As we head into September, activity is expected to pick up again. The early autumn market is traditionally strong, with families aiming to move before Christmas and fresh listings drawing buyers back in.
Mortgage rates are edging down, and there’s hope of further cuts if inflation continues to ease. While political and economic uncertainty remains in the background, the fundamentals point to a stable autumn market.
For the North East, the outlook is positive. We expect modest growth to continue, particularly in Newcastle’s most sought-after areas, with transactions holding steady as long as pricing remains sensible.
In summary: The summer of 2025 has been about balance. The frenzy of recent years is behind us, replaced by a calmer market where both buyers and sellers have to think carefully and act decisively. The North East continues to lead the way in affordability and growth, and with autumn upon us, there’s every reason to feel confident that the market will end the year on a steady footing.