In early 2023, most property forecasters anticipated a significant downturn in the UK housing market over the following two years. Halifax predicted an 8% drop in house prices, Savills went further at 10%, and Nomura Bank predicted a fall of up to 15%. While these gloomy forecasts grabbed headlines, the actual data tells a different story. According to the Land Registry …

UK house prices are 1.76% higher today than in January 2023, and Fife house prices are 6.1% higher.

Now, as we are halfway through 2025, many are asking the same question again: will house prices crash this year? Based on current data and trends, the answer is no.

The first thing to note is that although there have been some slight dips in the national averages in early 2025, the falls have been modest. Nationwide reported a 0.8% drop in June (the most significant monthly dip in two years), and the Land Registry figures for April showed a 2.8% annual fall. However, this needs to be put into context. These figures follow a period of exceptional growth during the pandemic years; one shouldn’t expect the market to collapse, and it is now normalising rather than collapsing. Rightmove, which tracks asking prices rather than completed sales, reported a 0.3% drop in June, citing an increase in supply and fading of the stamp duty boost.

Also, Denton House Research uniquely track the £/sq.ft figures at the sale agreed date in the UK. The £/sq.ft figures track the Land Registry five months in advance with a 98% correlation. This means we know what will happen to the published Land Registry house prices five months in advance with a very high level of certainty. Five months ago, the pound per square foot for UK home sales agreed was at £338.67, and today it stands at £346.25 per square foot. Therefore, based on this calculation, UK house prices should be 2.24% higher by January than they are today. None of these points point to a crash.

Looking at the total number of property sales in Fife …

In the first six months of 2024, 3,080 Fife homes were sold subject to contract. In 2025, the figure increased to 3,184 … a sign of growing confidence in the market.

Fife – KY1-KY12, KY14-KY16.

In fact, at the start of the year, most forecasters expected prices to rise moderately this year. Savills and the HomeOwners Alliance both project growth of around 4% in 2025. Zoopla has forecast a more cautious 2.5% rise, and Knight Frank predicts a similar increase. Capital Economics anticipated average house price growth of around 4% per year between 2025 and 2027. The consensus across the industry is for stability or a modest recovery, rather than a dramatic decline.

A key reason for the relative resilience of Fife

house prices is the low mortgage rates.

After climbing to over 6% in 2023, rates have stabilised and are expected to continue to fall gradually through 2025. Many lenders have already dropped their fixed-rate deals below 4.5%, and further reductions are likely if the Bank of England continue to cut its base rate later in the year. This shift in affordability is expected to improve buyer sentiment and support price levels.

Crucially, the UK labour market remains strong. Unemployment is low, currently sitting at around 4.6%, and wage growth is holding steady at 5.2% per year. This means that most households can manage their mortgage payments, even with higher interest rates. There is little sign of the kind of financial stress that forces mass sales or repossessions, which typically precede major house price crashes.

Another critical factor is the increasing regulation of mortgage lending over the past decade. Since the introduction of the Mortgage Market Review in 2014, borrowers have had to demonstrate that they can afford repayments at interest rates significantly higher than those they are currently paying. This stress testing was designed to create market resilience, and it has been effective. Even at the height of ultra-low rates, new borrowers had to demonstrate that they could afford repayments of 6.5% or 7%. Now that rates have risen, most are already well-equipped to manage the change. The average stress test rate in 2024 was 7.5% to 8%, and borrowers continue to pass these checks.

There’s also more balance in the Fife property market.

There has been a rise in the number of Fife homes for sale, with 1,188 available today, up from 984 in July 2023. Meanwhile, buyer enquiries have also increased.

This subtle increase in the supply of Fife homes on the market offers Fife buyers more choice and has helped prevent bidding wars that inflate prices. Yet demand remains strong, supported by population growth, longer life expectancy, lifestyle changes, and the ongoing desire for homeownership. This equilibrium of supply and demand is stabilising prices, not sending them into freefall. You see, one of the main reasons UK house prices dropped in 2008 was the high level of homes on the market. In August 2008, there were 2,213 homes for sale in Fife!

Meanwhile, the rental market is adding another layer of support. High rents have prompted many tenants to consider buying as a more cost-effective long-term option. This has boosted first-time buyer numbers, especially in areas where house prices remain relatively affordable, like Fife. Some Fife landlords are also exiting the market, which reduces rental stock, drives up rents further, and makes buying more appealing.

Of course, there are variations across the UK. Some parts of London and the South have seen a softening in house prices over the last few years, as affordability pressures and changes to stamp duty and landlord taxation have taken a greater toll. However, many regions, particularly those in the North of England, Northern Ireland, and parts of Scotland, continue to experience modest house price growth. Regional disparities will always exist, but they don’t change the national picture, which is one of moderation, not meltdown.

Could a house price crash still occur?

It’s not impossible, but the necessary conditions are not present. To see a genuine crash, we would need a perfect storm: a sharp rise in unemployment, a sudden spike in interest rates, a collapse in mortgage availability, and a wave of forced sales. None of those elements are currently on the horizon.

Even the risks that do exist, i.e. slower-than-expected rate cuts, changes to government housing policy, or economic shocks from abroad, would likely lead to stagnation or small dips, rather than a crash. The foundation of the UK housing market is far stronger than it was in 2008 or the late 1980’s. There is no subprime mortgage crisis, no rampant overborrowing, and no glut of unsold new builds.

In conclusion, although the UK housing market in 2025 is not without its challenges, the data and trends indicate a firm direction towards stability. A crash remains highly unlikely. Most regions are expected to experience slow but steady growth. Some pricier areas may dip slightly. But overall, the narrative for 2025 is one of cautious optimism. Buyers and sellers alike would do well to tune out the crash headlines and focus on what the numbers are saying.

If you’re planning to move, buy, or invest this year, opportunities abound, especially if you understand your local market and take a long-term perspective. This is a normalising market, not a collapsing one.

These are my thoughts, what are yours?