Over the past year, the residential market has moved from rapid price growth to a more balanced environment.
Higher borrowing costs increased monthly payments and reduced affordability, especially in London’s prime and upper‑mainstream segments.

Nationwide’s October 2025 index shows annual UK price growth at 2.4% and a 0.3% monthly rise, describing conditions as broadly stable. Halifax’s index similarly puts annual growth around 1.9%.
However, stability at national level masks local divergence: well‑priced, well‑specified homes still attract competitive interest, while over‑priced stock is taking longer and facing reductions.

For developers, the market now rewards strong specification (energy efficiency, good daylight, practical layouts) and realistic pricing more than ever. Sellers benefit from professional presentation and evidence of build quality, while buyers increasingly demand transparency on running costs and technical performance.

Resale supply is still structurally limited because many owners remain locked into ultra‑low mortgage rates from 2020–2022 and prefer not to move. This suppresses turnover and creates scarcity in family‑home segments, particularly in established London neighbourhoods.

At the same time, buyer caution has reintroduced price realism. Rightmove’s November 2025 index recorded a 1.8% monthly fall in asking prices (largest November drop in over a decade), and around a third of listings reduced prices during the month.
The effect is most visible above £500k and especially at prime levels, where affordability ceilings are firm.

Net result: values are resilient where supply is genuinely tight and price points remain aligned with local incomes, while higher‑priced or compromised homes require sharper pricing to clear.

Affordability pressure is changing what sells. Buyers are trading headline size for usability, energy efficiency and lower maintenance.
Properties with strong EPC ratings or clear retrofit potential consistently transact faster, as running costs now form part of purchase decisions.

Regional divergence has widened through late 2025. Zoopla reports UK annual growth around 1.3% but highlights stronger performance in Scotland, Wales and Northern regions (above 2% growth), while much of Southern England remains flat.
London’s market is therefore demand‑supported but selective: specification and usability matter more than size.

For developers, the winning formula is compact-but-flexible layouts, plentiful storage, excellent daylight and a durable, fabric‑first envelope.

The planning system remains one of the biggest constraints on housing delivery. Local planning authorities face resource shortages while policy requirements expand (design codes, greening, heritage scrutiny, fire statements, viability reviews).
Decision timelines frequently exceed statutory targets, increasing holding costs and programme risk.

Mandatory 10% Biodiversity Net Gain (BNG) in England adds another deliverable to resolve early, especially on small suburban plots where on‑site solutions may be limited.

Projects that enter planning with coordinated technical evidence—daylight/sunlight, transport, drainage, ecology, energy strategy, fire and access statements—achieve faster decisions and stronger valuation uplift.

Construction inflation has cooled compared with 2021–2023 highs, but cost levels remain structurally elevated.
Tender price growth in 2025 is broadly 3–4% year‑on‑year, driven mainly by labour, risk allowances and M&E volatility rather than raw materials.

Typical mid‑spec build costs sit around £1,750–£2,450/m² nationally, with high‑spec London schemes above that depending on basements, glazing ratios and services complexity.
As a result, developers are leaning into simplified forms, repeatable details and fabric‑first energy performance to protect margins.

In this market, buildability is not just a construction concern — it is a core part of pricing strategy and sales liquidity.

Across London, new‑build demand continues to favour developments that combine strong architectural character with practical day‑to‑day usability. Schemes that prioritise well‑proportioned rooms, storage, and a calm material palette tend to outperform generic stock.

Technical performance also matters more than ever. Buyers are increasingly aware of energy efficiency, ventilation quality and long‑term running costs. Early coordination between architecture, structure and MEP design helps deliver comfortable, low‑maintenance homes that stand out at resale.

For boutique developers, this is an advantage: smaller schemes allow tighter design control and clearer accountability, which translates into better buyer confidence and stronger pricing.