2025 Housing Market Forecast: Key Insights for Redrose Estate Clients
Are you thinking about making your move in 2025? The coming year holds plenty of opportunities and challenges for both buyers and sellers in the housing market. To help you navigate these changes, our team at Redrose Estate Agents has analysed the latest trends and forecasts using information from Rightmove. Here are the top five things you need to know to stay ahead of the game.
2025 Housing Market Forecast: Key Insights for Redrose Estate Clients
- 2025 Will Remain a Buyer’s Market
The housing market in 2025 is expected to continue favouring buyers, much like the previous year. Increased availability of homes and longer average selling times mean buyers will likely hold the upper hand when negotiating sales.
What about house prices? Rightmove experts predict a steady increase in average asking prices, rising by around 4% by the end of the year. While this represents the highest annual growth since 2021, it aligns with the long-term average rather than the exceptional spikes seen during the pandemic years.
Additionally, we anticipate approximately 1.15 million property completions in 2025, reflecting improved market activity. However, sellers must remain competitive with their pricing to attract buyers and close deals efficiently.
- Mortgage Rates Are Set to Ease, But Not Dramatically
Good news for buyers and homeowners: mortgage rates are expected to drop in 2025. Five-year and two-year fixed-rate deals could fall to around 4.0%, down from their current averages of 4.83% and 5.08%, respectively.*
This decline is linked to anticipated Bank of England’s Base Rate reductions. While this is a positive development, unpredictable factors such as inflation and global events could still affect the market. Buyers opting for two-year fixed deals may find these increasingly appealing due to their flexibility and narrowing cost gap with longer-term options.
Although rates are falling, we’re unlikely to return to the historically low rates seen in previous years. Nevertheless, these improvements are expected to bolster buyer confidence and affordability.
*Rates accurate as of December 2024, provided by Podium.
- Stamp Duty Changes Could Influence Buyer Behaviour
From 1st April 2025, stamp duty rates will increase, leading to higher buying costs for many movers. This shift has already spurred a wave of activity, as some buyers aim to complete transactions before the deadline.
First-time buyers are particularly active, with enquiry levels 13% higher than this time last year. However, the impact of the new stamp duty threshold will vary across regions. For instance, only 8% of properties in London qualify for first-time buyer relief, compared to over 70% in the North East.
Tim Bannister, a Rightmove property expert, notes: “The upcoming stamp duty changes will likely drive a busy start to the year, as buyers and sellers rush to complete transactions. Beyond April, we expect the effects of these changes to shape market negotiations, particularly for properties near the £300,000 threshold.”
- Remortgaging Will Be a Priority for Many Homeowners
If your fixed-rate mortgage deal ends in 2025, remortgaging is likely to be a key consideration. Many homeowners who secured five-year deals in 2020 or shorter-term fixes in 2022 will face new decisions as their agreements come to an end.
Here’s what to expect:
- Those who locked in low five-year fixed rates during 2020 could see increased costs when remortgaging.
- Homeowners on two-year fixed deals secured at higher rates in 2022 or 2023 may benefit from reduced monthly payments as rates decline.
Ready to Make Your Move?
At Redrose Estate Agents, we’re here to help you navigate the 2025 housing market with confidence. Whether you’re buying, selling, or remortgaging, our local expertise and tools like our Instant Valuation service ensure you’re well-prepared every step of the way.
Let’s make your property goals a reality in 2025. Click here to contact us to get started today to learn more about how we can help you achieve your property goals. At Redrose, your journey to finding the perfect home starts here.
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2025 Housing Market Forecast: Key Insights for Redrose Estate Clients