1. Persistent Buyer's Market
In 2025, the UK property market is expected to remain a buyer's market. This implies that supply will exceed demand, with a downward trend in property prices, placing buyers in a favorable position in transactions. An increase in the number of homes for sale and an extension in the average time taken to sell indicate that homebuyers will continue to hold the upper hand in closing deals.
2. House Price Forecast: Moderate Increase
Despite the overall characteristics of a buyer's market, data from Rightmove analysts suggests that the average UK house price is expected to rise by 4% by the end of 2025, marking the largest predicted increase since 2021. This forecast reflects the continued strong demand despite an increase in homes for sale, particularly in scenarios where supply cannot meet demand, leading to significant house price increases.
3. Mortgage Interest Rates: Decrease but Not Rock-Bottom
In 2025, it is anticipated that the Bank of England may reduce the base rate four times, causing five-year and two-year fixed rates to gradually decrease from the current 5% to around 4.0%. However, geopolitical events and inflation, among other external factors, could still alter the future trajectory of interest rates, meaning we are unlikely to see a return to ultra-low mortgage rates.
4. End of Stamp Duty Tax Holiday
From April 1, 2025, the stamp duty tax holiday will come to an end, leading to an increase in stamp duty rates, which could mean higher costs for homebuyers. Consequently, some buyers may rush to complete purchases before the deadline, potentially increasing the number of inquiries from first-time homebuyers in the market.
5. Remortgaging Takes Center Stage
Due to the high interest rates of the past two years, the consecutive rate cuts have led some homebuyers to consider new loan plans. In 2025, remortgaging is likely to become a new focal point in the market. This trend could lead to a bifurcated market, with some customers facing higher loan costs while others save significantly as rates decrease.
The UK property market in 2025 is filled with uncertainty but also brimming with opportunities. By gaining a deep understanding of market trends, investors can better seize the moment and make wise investment decisions. We offer a comprehensive service for UK property investment, from market analysis to property selection, from loan consultation to legal support, we are committed to helping you succeed in the UK property market.
