In 2024, the property market outperformed all expectations. House prices surged, rental figures hit new records, and buyer demand showed no signs of slowing down. As we step into 2025, lets take a look at what some experts are predicting we’ll see from the market this year.
Shaped by ongoing economic conditions, government policies, and regional trends, experts are anticipating another year filled with opportunities, and challenges. Whether you’re a buyer, seller, or investor, understanding the market’s direction is vital. Here’s an overview of what to expect in 2025.
House Price Growth
The UK property market saw encouraging growth in 2024, with house prices increasing by more than 3%. Looking ahead, many experts – including Nationwide, Halifax, Savills, and Rightmove forecast average price growth of 2% to 4% in 2025, both within and outside London.
London’s houses prices are projected to match or slightly exceed 2024 levels, before a stronger surge likely in 2026. The popularity is expected to rebound as more companies return to office-based work, and the demand for rural homes eases post-pandemic.
Outside London, regional markets are set to shine. Savills predicts house prices in northern areas like Greater Manchester, Liverpool, and Yorkshire could rise by up to 4.5%, driven by strong demand and ongoing regeneration projects.
Buyer Demand
Buyer activity is expected to remain strong in 2025, following a 26% increase in demand last year. The first quarter of this year is expected to be additionally busy, as many rush to finalise transactions before anticipated stamp duty changes take effect.
Interest rates will play a pivotal role in shaping buyer demand. The rates are expected to start the year with a slight drop, reaching approximately 4.2% by year-end. Lower rates are likely to drive even stronger buyer demand, across all buyer types: first-time buyers, those looking to upsize, and definitely investors.
It is anticipated that the positive trends we saw last year will carry into 2025, with more investors finalising deals, encouraging market growth, and boosting confidence in the property sector.
Tenant Demand
Tenant demand remains a key driver in the UK property market, particularly for buy-to-let areas, where viewings and interest are likely to rise.
City centres like London, Manchester, and Birmingham are expected to experience high rental interest due to strong job markets and excellent transport links.
According to Rightmove, tenant demand in 2024 was nearly double pre-pandemic levels, averaging 19 enquiries per rental property. Over the past five years, rents have risen by 40%. However, 2025 is predicted to bring a more balanced rental market as supply gradually improves, with rental prices likely to see around 3% growth.
Conclusion
The UK property market in 2025 offers opportunities for all, from buyers capitalising on lower interest rates to investors seeking strong returns in high-demand rental areas. However, with many changes on the horizon, staying informed is essential for investors. Before making any property decisions, consult with a professional to ensure your strategy aligns with the evolving market conditions.
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