Housing Market Predictions 2025

As the year draws to a close, it’s a tradition to reflect on the past months and on housing market predictions. It’s been a hectic 2024 with a housing market proving remarkably resilient through a long election campaign, a dramatic change of government and a challenging Autumn Budget. This was all set against a backdrop of persistently high inflation and slow-to-decrease interest rates.

But I’m not going to dwell on the past, because 2025 does look like an exciting year to come for all of us. Whatever plans we have for our home.

We’ve reviewed the various indices, analysts and other property soothsayers to give what I hope is a reasoned set of market predictions based on their expert forecasts for the housing market. Here goes…

Sellers

With major price indices ending 2024 with small and sustainable price rises, there’s no reason for not going to the market in 2025 if that’s what you and your family want. Housing market predictions suggest stability for sellers.

Two major property portals expect to see around 1.15m house moves in 2025 (up to 10% higher than 2024).

But because there will be a lot of other properties on sale at the same time, experts advise not being over-ambitious with your asking price.

One portal specifically puts it bluntly, saying that in the 12 months ahead “buyers will be spoilt for choice” so sellers should be sensible on pricing.

First-time buyers

I separate this group from other property buyers because of their special timeframe. If first-time buyers complete their purchases by April 1st, 2025, they benefit from a temporary stamp duty exemption.

Until April 2025 first-timers pay no stamp duty on homes up to £425,000. From spring 2025 they pay on properties costing £300,000 or more.

Completing a home in three or four months is a tall order these days. It’s certainly the case that smaller properties appropriate for first-time buyers will be in high demand. Even over the Christmas break!

Our friends at Propertymark, the agents’ trade body, say the housing market accelerated in October in anticipation of the April deadline and that busyness will continue as the date nears.

Homebuyers

Another property portal has boldly predicted a buyers’ market for 2025. With the supply of homes on sale exceeding the number of would-be purchasers, according to their housing market predictions.

Even so, the portal anticipates a 4% average rise in asking prices over the coming 12 months so, if possible, a purchase that’s sooner rather than later may pay off financially.

Most other major estate agents and property analysts paint the same picture of a buoyant housing market.

Renters

When the Renters’ Rights Bill becomes law this spring, which many people think will happen. It will stop some unfair practices by a minority of rogue landlords. While tenants may be happy about this change, it’s important to remember that the bill won’t solve all problems. The biggest issue is still about supply and demand, which affects rent prices differently in various parts of the UK.

The private rental sector has been under considerable strain for the last 20 years, largely due to insufficient house building. Without additional government support, such as more social housing or to give tax breaks to homeowners or landlords, rent prices in the private market might still go up in 2025, albeit slower than those of recent years.

Landlords

For existing landlords with good tenants and perhaps no remaining mortgage, buy-to-let remains a solid long-term investment. And as important, there’s a genuine nobility in doing something that provides others with a home.

It’s an increasingly complex business and using a professional lettings agent can ensure you’re across the 150+ laws and regulations relating to energy efficiency, safety, council licensing and more.

Perhaps unsurprisingly, new landlords are few and far between these days, as the returns are rarely high, and the complexity can be a deterrent. For good or for bad that’s been the case in recent years and won’t be changing in 2025, according to housing market predictions.

What else?

There’s plenty ‘else’ in 2025.

Expect impassioned debate (nationally, and in almost every locality too) over house building targets and the high volume of new homes the government is determined to achieve. That’s a difficult balancing act for politicians and the public.

There’s also likely to be additional leasehold reforms, probably good news for those saddled with high service charges. After much debate, there may be definite energy efficiency targets for rented homes, likely to have a lengthy lead-in until 2030.

Interest rate falls continue to be tipped by analysts although don’t expect too much, too soon.

Meanwhile, every agent I speak with bemoans long transaction times. It’s often five months or more between accepting an offer and being able to move into a house. And few expect that to improve in 2025 without legislation to make sellers and agents provide much more information to buyers ‘up-front’.

That’s enough to be going on with!

The good news is that despite change all around, the market is forecast. And predictions are optimistic – by many commentators and analysts – to be in strong shape in the next 12 months.

Whatever your property plans in 2025, and regardless of housing market predictions, Move iQ is here to help.

Last Updated: December 20th, 2024