2025 Housing Market

It’s certainly worth planning ahead if you are thinking of making a move in 2025, especially as the housing market continues to evolve. To help you stay ahead of the curve, take a look at our predictions to ensure you start your moving journey as prepared as possible.

When providing our 2025 house market predictions, we have considered seasonal trends from previous years as well as what we expect to play out in the wider economy. We have also taken into consideration the direction of mortgage rates and the possible influence that could have on the market.

Falling Mortgage Rates

It looks like mortgage rates are expected to fall in 2025, with both two-year and five-year fixed rates predicted to drop close to 4.0% mark, down from rates closer to 5.0%. This is based on the anticipation of multiple base rate cuts from the Bank of England throughout the year. However, external factors like inflation and geopolitical events could still influence the trajectory of these rates.

For homeowners or prospective buyers choosing between fixed-rate options, shorter two-year deals may become more attractive. As rates for two-year terms align more closely with five-year options, the increased flexibility of a shorter term could appeal to those looking to adapt quickly to changes in market conditions.

While lower rates could improve affordability and buyer confidence, it’s important to note that the ultra low mortgage rates seen in the past are unlikely to return any time soon. We expect the market to stabilise at higher rates compared to pre 2022 levels, even if the future trend is downward.

Stamp Duty

From April 1st 2025, stamp duty rates are set to increase, which means a rise in costs for many house hunters.

Based on this change, we expect that first time buyers will be particularly active in the first quarter of 2025, as many rush to complete their purchases before the new stamp duty rates kick in. A property expert from Rightmove, Tim Bannister suggested that both buyers and sellers will try to navigate the rising costs causing significant activity in the market. It’s also expected that negotiations could intensify, especially on properties priced near the £300,000 mark, as both parties attempt to offset the increased charges.

It’s certainly looking like its going to be a dynamic start to 2025 for the UK housing market, with many buyers trying to get ahead of the stamp duty hikes, while sellers may adjust their asking prices to account for the rising costs.

Buyers’ Market

2024 was certainly a buyers market and 2025 is set to be no different. An increasing number of homes for sale and longer average time to sell means house hunters will continue to have the upper hand when it comes to agreeing a sale. These market conditions will make it easier for buyers to find a property that meets their needs without feeling rushed or pressured.

With more people choosing to make their move in 2025, teamed with lower mortgage rates, we expect to see a rise in house prices and forecast an increase of between 3% and 4% over the course of 2025.

We expect around 1.15 million completions to happen over the course of 2025, UK wide, which is an increase on recent years. This activity reflects improving market conditions, but sellers will still need to competitively price your home in order to find a buyer.

Are you looking to move in 2025?

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