The annual jostling around predictions for the 2025 property is well underway with Rightmove the latest to lend its thoughts on what the 2025 property market might look like. The headlines from the property portal’s predictions include an uplift in transaction volumes; a series of Bank of England base rate cuts throughout the year, and a busy first time buyer market, despite the end of SDLT concessions for FTBs.
Coming into 2025, estate agents are buoyant with stock availability, with the average number of properties for sale per estate agent branch at its highest in 10 years for the December period. Over the past 12 months, the dynamics in the market have shifted from being a seller’s market, with an imbalance of more buyers to fewer sellers, to a buyer’s market with more stock encouraging greater competition between vendors. Rightmove say it sees no reason for the current availability of stock to fall and predicts the number of homes for sale to remain high next year; which in turn will see transaction volumes above average at around 1.15m transactions.
Some of that activity will be driven by cuts to Bank of England base rates which Rightmove predicts will see four changes over the course of the year, driving average mortgage rates down to 4%; lower than the current 4.83% and 5.08% for the five-year and two-year fixed rates respectively, improving affordability and further boosting consumer confidence. Forecasting beyond 2025 proves challenging says the portal, pointing to wider geopolitical tensions and inflation.
The current activity in the first time buyer market, which currently makes up around 1/3rd of all transactions, will continue too drive volumes in 2025 despite the end of enhanced SDLT concessions from 1st April 2025. But, says Rightmove, the wide availability of homes which sit under the £300,000 threshold for first-time buyers, should still drive this part of the market forward, with as many as three in four homes currently available in some areas, falling under the threshold at which FTBs pay SDLT; and 37% of properties nationally. And the number of active first-time buyers sending enquiries to agents is up 13% on the same period last year.
Region % of homes for sale that will be stamp duty-free from 1st April 2025
| London | 8% |
|---|---|
| South East | 24% |
| East of England | 32% |
| South West | 34% |
| England | 37% |
| West Midlands | 48% |
| East Midlands | 53% |
| North West | 58% |
| Yorkshire and The Humber | 61% |
| North East | 73% |
The portal is also predicting national average asking prices will rise by 4% in 2025, the largest increase it has predicted since 2021 but it says, is in line with long term price growth. No where will this be more prevalent than in London where the average asking price for a home over the past five years has increase at a slower rates than nationally – 12% against 21% nationally. There are mitigating circumstances; Brexit and the COVID years have both had a significant influence to the extent the value of the average London property was more than double (+101%) the national average in 2019. The gap has since reduced to 86%.
Commenting on the predictions Rightmove’s property expert Tim Bannister says:
“We expect a busier year in 2025, with around 1.15 million transactions completed. Stamp duty charges rising from 1st April means we are likely to see a particularly busy first three months of the year as first-time buyers, home-movers and investors all try to complete on planned purchases and avoid higher charges. The effects of stamp duty rising will be felt for the rest of the year too, and we may see some negotiation tactics play out, particularly on properties close to the £300,000 mark, as both buyers and sellers try to mitigate their higher costs through the price agreed.”
Matt Smith, Rightmove’s mortgage expert adds:
“It is likely to be a mixed year for the market. Those who took out peak-mortgage rate two-year fixes after the mini-Budget will see their deal come to an end and will likely find themselves with lower costs next year. Combined with wage growth, they may feel some significant affordability improvements. By contrast, many movers will be rolling off a relatively low five-year fixed rate agreed during the busy market of 2020 and will see costs rise. With remortgaging and product transfers set to be an important theme for lenders next year, we’ve launched a remortgage rate tracker to show the latest trends in this sector and monitor lender behaviour next year.”
Elsewhere, commentary from Toby Leek NAEA President of estate agency membership and training body Propertymark said
“Following the UK Government’s recent Autumn Budget, we are expecting to see a potentially busier than usual winter period as many people across England and Northern Ireland look to complete before 1 April when Stamp Duty thresholds change. Typically, this will add an additional tax liability of around £2,500 for many people on the purchase of a property.
“In Wales, there have been no changes to the main rates of Land Transaction Tax, but higher rates have increased when purchasing a second property. Furthermore, in Scotland, apart from increased rates when purchasing a second home, there are no proposed changes in Land and Buildings Transaction Tax rates and bands when purchasing a main home expected before 2026.
“That said, there are certainly positives to be had looking at the housing market as it stands today, with inflation now back broadly at targeted levels and interest rates creeping back downward as well, which means many people are finding themselves in a much stronger position regarding overall affordability than only twelve months ago. As we round off the year, the property market sits in a much more upbeat position and will enter 2025 geared for growth.”
One Response
I predict that people will finally realise that the large national estate agencies with their own in house or pet conveyancing businesses will fail as people realise that efficiency isn’t created by over relying on technology at the expense of employing qualified conveyancers because, and this will be a revelation for some, conveyancing is a legal process that requires legal thinking agility as each transaction is different.
Hopefully it will see the demise of technology generated Standard Enquiries and perhaps the Regulators will step in and protect consumers from the greed that rewards inefficient businesses.