As the year draws to a close, housing experts have released their predictions for 2025, and the property forecast is optimistic. According to national firms such as Hamptons, Savills, and JLL, the housing market is set for steady growth rather than a boom, with positive indicators pointing to a stable and promising future.
A Quick Look Back at 2024
This year, the housing market has exceeded expectations. Hamptons anticipates 1.1 million property transactions by the end of December, a significant rise from the 996,000 transactions recorded in 2023. House prices are also on track to increase by 3.5% compared to the previous year.
First-time buyers have been particularly active, making up almost a third of all property purchases – a strong indication of renewed confidence in the market.
What’s Ahead for 2025?
The 2025 property forecast suggests a favourable environment for both buyers and sellers. Interest rates are expected to drop, with the Bank of England base rate (currently 4.75%) predicted to fall to 3.75% within the next 12 months. Lower interest rates, combined with stabilised inflation, are set to create more opportunities for growth in the housing market.
Hamptons forecasts a 3% rise in property values next year, even taking into account the impact of recent stamp duty adjustments. This steady growth will likely benefit homeowners and investors alike.
Relief for Mortgage Holders
A significant turning point could be approaching for homeowners who were hit hardest by the aftermath of the mini-budget. Many locked into two-year fixed-rate mortgages at over 5% and will find more competitive rates available – some now below 4% – as their deals expire. This shift is expected to alleviate financial pressure for many households.
A Long-Term Perspective
For most homeowners, property is a long-term investment. Looking further ahead, the property forecast is highly encouraging. Savills predicts property prices will grow by 3.5% in 2025 and rise by 21.6% over the next five years. JLL offers a similar outlook, expecting a 20% increase by 2029.
These projections are based on three critical factors: interest rates will continue to fall (although not to pre-2020 levels), inflation will remain stable, and the housing supply shortage will persist. While the future is never guaranteed, property remains a sound and reliable investment for those who buy wisely.
Thinking of Moving in 2025?
If you’re considering a move next year, now is the perfect time to plan ahead. Contact us for a free, expert valuation and advice on navigating the 2025 housing market.
Do you know someone who would benefit from this property forecast? Share this article with them today and help them make informed decisions about their next property move.
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