2025 property market predictions | UK housing market forecast

Posted on: Friday, January 24, 2025

You can’t predict the future entirely, but many are expecting the property market to improve and build on the significant step forward it took last year. In fact, 2025 is enjoying a strong beginning on the back of more sales agreed, and one of the biggest sales pipelines from December in years. As economic stability strengthens and confidence returns to both buyers and sellers, 2025 is shaping up to be a promising year.

Stamp duty will stimulate the market

The increase in stamp duty by 2% from 0% of the portion priced between £125,001 and £250,000, set to take effect on April 1, 2025, may seem like a modest rise, but its implications are far-reaching. While the 2% hike may not be substantial, the timing of the increase is crucial. Homeowners are already preparing to beat the deadline, creating a surge in market activity. As the market is already gaining momentum, there is an increase in competition and an acceleration in sales. This is adding an extra boost to the market and as a result, UK house price predictions for 2025 show potential price fluctuations with buyers needing to act fast, or risk paying higher taxes. Read our blog to understand the upcoming stamp duty changes in 2025.

A first-time buyer flurry 

First-time buyers in the UK will face significant changes in the housing market as the 0% stamp duty threshold drops from £425,000 to £300,000. In addition to the stamp duty change, the Mortgage Guarantee Scheme, which has been extended several times and has a deadline in June 2025, will also encourage first-time buyers to act quickly. As this initiative allows individuals with lower deposits to access mortgage deals, it will likely stimulate demand in the housing market. The ripple effect from first-time buyers stepping onto the property ladder will also benefit second-steppers, creating broader movement across various segments of the market. With these changes, UK house price predictions suggest a period of rising demand, which may put upward pressure on property prices. Mortgage rates are widely expected to fall as the year progresses, although homeowners are no longer holding out for the super low levels of past years. This has already added another layer of confidence to the market, and the signs are promising that this will continue as the year unfolds. 

You will have a greater choice of homes

With increased construction and market activity, buyers will enjoy a broader range of options in 2025. From contemporary city apartments to spacious family homes in suburban areas, there will be an exciting choice of homes. Renovations and upgrades to existing properties will also play a significant role, providing energy-efficient homes that are ready for modern living with real style and character. 

A better market  

The Renters’ Rights Bill expected to become law this year is another dynamic to add to the mix. However, the Conservatives were unable to implement their version, claiming that the court system would require reform. Will Labour encounter the same obstacle? If not, it could benefit landlords by providing clear guidelines, reducing disputes, and ensuring reliable rental income. For tenants, it ensures fairer treatment and protection from unjust evictions, as well as greater rights and transparency. In 2025, we anticipate a balanced market where both buyers and sellers will have opportunities to thrive. Sellers will benefit from motivated buyers eager to secure their dream homes, while buyers will enjoy fair pricing and a competitive range of choices. Property prices have steadily grown over the years but not skyrocketed. These appealing market conditions make moving easier.

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Do you have a property plan for 2025? Contact your local Guild Member today to discuss your requirements.