Property News: What's In Store for the Property Market in 2025?
Welcome to the first property market update of 2025. Let’s take a moment to reflect on how the market performed in 2024 and dive into predictions for what the next 12 months may bring. From shifting trends to emerging opportunities, here’s everything you need to know about the property landscape in 2025.
2024: A Year of Recovery
2024: A Year of Recovery
After the turbulence of 2023, driven by economic shocks from the mini-budget of late 2022, 2024 emerged as a year of stabilisation and recovery for the property market. By analysing data from Twenty EA, several notable trends can be identified across the regions we cover:
- New Properties: There was a 7% increase in the number of new properties coming to market, with an average asking price of just over £290,000—a 4% rise compared to the previous year.
- Sales Volume: Sales activity surged by 15%, with average sale prices growing by only 2%, reflecting cautious buyer behaviour.
Key Takeaways from 2024
These figures reveal several important insights about the state of the market:
- Supply Challenges Persist: The market continues to face a shortage of available properties.
- Pricing Matters: Buyers remain price-sensitive, as properties listed at unrealistic prices struggled to sell.
- Buyer Activity is Back: The increased sales volume signals a return of buyers to the market, but they are more discerning than ever.
- Agent Expertise is Crucial: Navigating this evolving landscape requires the skill and knowledge of reputable estate agents.
What to Expect in 2025?
Looking ahead, 2025 is set to bring both opportunities and challenges to the property market. Here are the key predictions:
Mortgage Rates to Ease
One of the most anticipated trends for 2025 is the continued decline in mortgage rates. As lenders compete for buyers, borrowing is expected to become more affordable. This will likely lead to increased buyer activity, especially among first-time buyers and those looking to upsize.
Limited Interest Rate Cuts
Despite falling mortgage rates, the Bank of England's headline interest rate may not see significant reductions. Factors such as economic uncertainty and fiscal policies, including the National Insurance changes and minimum wage adjustments in April, could prevent major cuts. A single rate reduction may occur, but expectations for rates dropping below 4% are slim.
Accelerated Price Growth
With lower mortgage rates, wage growth, and constrained housing supply, property prices are poised to rise at a faster pace than in 2024. The data suggests a potential 6% price increase across the region, with some areas seeing even greater growth.
Historical trends show a gap between inflation-adjusted UK house prices and real property values, reminiscent of the late 1990s. If this trajectory holds, 2025 could be a year of significant property value gains.
A Strong Year Ahead
While external uncertainties—both domestic and global—linger, the property market in 2025 is projected to be robust. For buyers, sellers, and investors, the year offers promising opportunities to navigate an evolving landscape. Whether it’s finding the right price, securing a competitive mortgage, or understanding local market nuances, this year will require careful planning and expertise.
Stay tuned for more updates as we track market performance throughout the year. Here's to a thriving 2025 for the property market!
