Is 2025 the year to buy or sell ? Personal circumstances of course are a key aspect, but so is the market itself, and predictions for the coming year can be an integral part of when to make your move. So, perhaps you’re wondering what the next 12 months could hold for the housing market. Take a look at our predictions to make sure you start your journey as prepared as possible.
2025 will still be a buyers’ market
Rightmove previously talked about 2024 being a buyers’ market, and 2025 may be set to be no different. Things like an improved choice of property for sale, higher prices, and of course currently higher interest rates may mean buyers will continue to have a slightly upper hand. However, as always if a property is priced sensible it will generate interest, and a sale.
Latest house price news: What’s happening now?
House prices hit a peak of £298,083 in November 2024 in the UK, according to Halifax. This surpassed the previous peak of £293,507 set in June 2022.
However, changes announced in the Autumn budget and changes to stamp duty rules coming into effect in April 2025 could impact UK housing market confidence.
Mortgage rates have been on a rollercoaster ride in recent years, from historic lows to the higher rates we saw following Liz Truss’s disastrous mini-budget in 2022. While there have been ups and downs since, mortgage rates are now down significantly compared to those highs which means buying a house is more affordable.
And the mortgage rate predictions are that rates will fall further in 2025, due to the expectation that the Bank of England will continue to cut interest rates.
What’s happening with sold prices?
Sold prices are the most accurate indication of what’s happening in the property market. However, sales that feature in this data may have been agreed months ago. So, they don’t necessarily reflect what’s happening now. However, they are still very useful:
- Nationwide: While Nationwide’s House Price Index reported an average house price of £268,144 in November. This was an increase of 1.2% on October 2024, and an annual increase of 3.7%.
Did property prices rise in 2024 ?
- Land Registry: The Land Registry’s House Price Index, reported an average house price of £292,000 in October with house prices up 0.2% versus September and up 3.4% compared to October 2023.
What’s happening with asking prices?
Looking at what’s happening with asking prices can give us a useful overview of what’s currently happening in the UK property market. However, the downside is that these figures are about the price asked for by sellers, not the sold prices agreed.
House price predictions for the next 5 years
Savills‘ house price prediction for the next 5 years is that the average UK house price will rise by a total of 23.4% by 2029 taking the average house price to £442,000.
Prices forecast for 2025
Experts predict that average asking prices will increase by 4% by the end of next year, which, is the largest growth since 2021, but is in-line with the long-term average. For context, the pandemic years of 2020 to 2022 saw extraordinary price growth, driven by lots more people looking to move than there were homes for sale.
Mortgage rates look set to fall, but not to historic lows
Five-year and two-year fixed rates could drop to around perhaps 4.0% in 2025, down from the current averages.
This reduction in average mortgage rates is tied to predictions of Bank of England Base Rate cuts in 2025. But as always, external factors like geopolitical events and inflation could change this.
For those deciding between fixed-rate options, two-year deals may become increasingly attractive as their costs align more closely with five-year rates. This trend reflects shifting preferences, with shorter terms potentially offering better flexibility.
Lower rates are likely to boost buyer confidence and affordability, however it is probable we won’t see a return to ultra-low mortgage rates.
Stamp duty changes impacting buyer activity
From April 1, stamp duty rates are set to rise, which could mean increased buying costs. Data has shown a rush among some buyers aiming to complete their purchases before the deadline.
Partner of Acres Nigel Deekes commented : “ The imminent date of the 1st April will see Stamp duty rise meaning we are likely to see a continuation of a busier market for the first three months of the year as buyers try to complete on purchases and avoid the increases. Following the changes we may see some negotiation tactics by buyers, “
Remortgaging will also be a big focus
If you’re nearing the end of a fixed-rate mortgage deal, remortgaging will probably be on your mind. Homeowners that taking five-year fixed rates during the pandemic, or two-year fixes after Liz Truss’ mini budget will face decisions about their mortgages as their deals come to an end.
Here’s what this could mean if your mortgage ends soon:
- If you locked in a five-year fixed rate during 2020, when fixed rates were much lower on average, you may see higher costs when you remortgage
- If you secured a two-year fixed deal at higher rates in 2022 or 2023, you could benefit from lower monthly repayments as rates decline
To help homeowners keep track of what’s happening with rates, Rightmove have launched a remortgage rate tracker. This can help you monitor trends, and explore your options when the time comes to lock in a new mortgage deal.
Our 2025 house price forecast
Since the Base Rate cut, we’ve seen an increase in buyer demand. The number of people contacting Acres about property was up 33% on the quieter 2023 housing market, and the number of sales agreed is up by over 57% to November 2024.
Despite a seasonal house price fall in November, the strong home-moving activity we have seem in December points to a possible increase in house prices in of 2025. Rightmove says : “The signs are that the market momentum that we’ve been seeing this year will continue, especially if mortgage rates drop to a level that gives greater affordability to some movers who have been waiting in the wings. However, we still expect some twists and turns next year. ”
While the Bank of England’s Base Rate, and mortgage rates, are predicted to edge down more slowly than previously thought, they’re still predicted to fall over the course of 2025.
“ More people choosing to make their move in 2025, teamed with lower mortgage rates, could push house prices up by 4% over the course of 2025. “
Prices end the year 1.4% above December 2023.
- Despite the festive lull, activity remains substantially stronger than the same period a year ago.
- Some movers are now waiting for the traditional New Year bounce:
- Rightmove’s real-time data also captures the impact of the looming stamp-duty deadline on March 31st 2025:
- Sellers of smaller properties in higher-priced areas are trying to beat the deadline to avoid higher tax
- Prices are holding up best in the first-time buyer sector, especially homes priced below the £300,000 threshold
- Despite the signs of a stronger 2025, headwinds remain, with the impact of Budget measures being a challenge
Lisa Brown of Acres Financial Services comments “ Home buyers will need to remain on their toes, as mortgage deals are still in something of a state of flux and lenders are repricing regularly. There certainly isn’t the luxury of being able to hold off from committing to a deal and expecting it to still be there in a week or so, as rates continue to come and go quickly.’
Contact Lisa / Acres financial service here for expert mortgage advice
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If you would like to discuss selling your home, please get in touch with us This email address is being protected from spambots. You need JavaScript enabled to view it. or call any of our busy, helpful teams/offices:
Four Oaks 0121 323 3088
Sutton Coldfield 0121 321 2101
Walmley 0121 313 2888
Great Barr 0121 358 6222
Lettings 0121 312 4997
Thank you for reading and your interest in Acres and our property for sale.
Nigel & Jayne Deekes – Acres Partners
