Strong start but bigger picture ‘uncertain’ – Rightmove

Record numbers of homes listed and buyer registrations point to a positive start to 2025 according to Rightmove; but, the portal warns, the speed at which the Bank of England reduces interest rates, the impact of the end of stamp duty incentives from April 2025 onwards, and unexpectedly high’ mortgage rates all point to bigger picture uncertainty in it’s latest House Price Index.

Listings since Boxing Day are at a 10 year high according to the portal; and 11% ahead of the same time last year. The number of buyers contacting agents about properties for sale since Boxing Day is 9% up on last year; and the number of sales being agreed over the same period is up by 11%. In its predictions for 2025 Rightmove said it anticipated c.1.15m transactions this year.

“New sellers have started the year with a bang, with a record number coming to market not only on Boxing Day itself, but across the start of the year to date. We’ve also seen a strong start to the year in new seller asking prices, though given the higher-than-anticipated seller competition, we would expect this to slow down over the next few months. The record number of sellers we’re seeing is a double-edged sword. It’s encouraging to see so many sellers with the confidence to come to market, providing buyers with fresh choice. However, with lots of homes for buyers to consider, sellers will need to work even harder to stand out from the crowd and attract a buyer. This could be with a tempting asking price, standout home features, immaculate presentation of the home, or a combination of all of these. It’s vital that in a competitive market, sellers take on the recommendations of their agent, particularly when it comes to setting a realistic price.”

says Colleen Babcock, property expert at Rightmove.

Estate agents have been enjoying a sizeable increase in stock over the course of 2024, with the average number of homes for sale per estate agency branch at the highest for this time of year in 10 years. But despite the positive there are warning signs not to be ignored. New seller asking prices are still nearly £9,000 below May 2024’s record, reflecting, say the portal, continuing buyer affordability constraints; a product of the nervousness of lenders to introduce more competitive lending rates. Rightmove’s weekly mortgager tracker shows the average five-year fixed rate mortgage rate just 0.3% down on the same time last year, 4.75% now compared with 4.78% then.

Inflation at 2.5% may have put paid to hopes of an early Bank of England interest rate cut in 2025, with uncertainty as to when it may happen impacting the market.

And the end of SDLT exemptions for First Time Buyers presents challenges for smaller-homes and typical first-time-buyer properties. Although enquiries are up, 8% since Boxing Day say Rightmove, it is the smallest increase of all market sectors. The portal warns first time buyer properties in areas where average pricing is above £300,000 exemption will be a ‘drag on the important bottom-of-the-ladder market… unless some additional help for first-time buyers is announced soon.’

“It’s important to look at the bigger market picture, despite the positive early lead indicators that we’re seeing. Many buyers are still affordability-stretched, with high mortgage rates restricting borrowing power and limiting what they can afford to pay. Meanwhile, first-time buyers have seen support schemes reduce and some also face higher stamp duty fees from April, all while contending with record rents and trying to save up for a deposit. Rightmove’s early-year snapshot shows a promising start to 2025. However, the market needs a boost for that momentum to be sustained, in the form of early and ongoing Bank Rate cuts, which should hopefully help to reduce mortgage rates. Some further support for first-time buyers would also be welcomed, particularly in more expensive areas of the country.”

adds Colleen Babcock, property expert at Rightmove

Matt Smith, mortgage expert at Rightmove, concludes

“The message around how many Bank Rate cuts we should expect this year keeps changing, creating some uncertainty for movers. News of high government borrowing costs was swiftly followed by better-than-expected inflation figures, highlighting how quickly the mood can change. The markets are still banking on a cut in February, but after that it becomes uncertain. I think we’ll need to get settled into the year a little more before the direction of travel for rates this year becomes clearer.”

Want to have your say? Leave a comment

Your email address will not be published. Required fields are marked *

Read more stories

Join over 7,000 conveyancing professionals – Check back daily for all the latest news, views, insights and best practice and sign up to our e-newsletter to receive our daily and weekly round ups

You’ll receive the latest updates, analysis, and best practice straight to your inbox.

Features