2025 Housing Market Outlook:
The housing market will undergo a period of transition in 2025.
While the dramatic price hikes of the past few years are likely to subside, several key factors will shape the landscape for buyers, sellers, and renters:
House Prices: Moderate Growth Expected
- Following a period of relative stability in the housing market in 2024, house prices are forecast to rise by 3-4% in 2025
- This moderate growth will be tempered by the end of the stamp duty holiday, which could dampen buyer enthusiasm.
Mortgage Rates: Potential for Decline
- Falling interest rates are expected to make borrowing more affordable.
- The Bank of England’s base rate is projected to decline, potentially leading to cheaper mortgage deals.
- However, first-time buyers may still face challenges in the housing market due to higher rates on 90% LTV mortgages.
Housing Market & Government Intervention: Support for First-Time Buyers?
- The government may introduce new schemes to assist first-time buyers, such as extended mortgage guarantee schemes or subsidies.
- These measures aim to address affordability concerns and boost homeownership rates.
- Lender schemes like the £5000 deposit scheme will help first-time buyers.
Landlord Exodus: Impact on Rents
- The continued “landlord sell-off” will likely exacerbate the rental shortage, driving up rents in the housing market.
- While the upcoming Renters’ Rights Bill aims to protect tenants, it may further incentivise landlords to leave the market.
Key Takeaways for 2025:
- Buyers: Negotiate aggressively, explore government support schemes, and secure competitive mortgage deals.
- Sellers: Price realistically to attract buyers in a potentially slower market.
- Renters: Expect higher rents and familiarise yourself with the upcoming tenant protections.
