Considering a move in 2025?

Here’s what experts forecast for the housing market over the next year, so you can plan ahead with confidence. 

1. 2025: A buyers’ market continues 

2. The trend of 2024 being favorable for buyers will persist into 2025. With a wider selection of properties available and extended selling times, buyers are expected to have more negotiation power. 

London's property market is set for a revival, fueled by international interest and the return to office-based work, making it a hotspot for property investment. 

Experts predict a 4% increase in average asking prices by the end of 2025. While this is the strongest growth forecast since 2021, it aligns with long-term averages. The housing frenzy seen during the pandemic from 2020 to 2022 has cooled, offering buyers more opportunities to secure their desired homes. 

Around 1.15 million property transactions are anticipated in 2025, reflecting healthier market conditions. However, sellers must price competitively to attract buyers. 

With mortgage rates easing and competitive pricing in play, 2025 presents an excellent chance for London home-buyers to make their move. 

Mortgage rates expected to drop but not drastically 

Mortgage rates for two- and five-year fixed plans may fall to around 4% in 2025, down from current averages. This drop is tied to anticipated interest rate cuts, though factors like inflation and global events could alter this projection. 

Two-year fixed-rate deals are likely to gain popularity as their costs align closely with five-year options, offering more flexibility. 

To seize opportunities in the UK property market, buyers in 2025 should stay informed on mortgage rate trends and plan strategically. 

Although rates are likely to become more affordable, they won’t return to the historically low levels of recent years. 

Stamp duty changes may impact buyers 

From April 1, 2025, stamp duty rates will rise, potentially increasing costs for some buyers. This has already spurred a surge in activity as many aim to complete transactions before the deadline. 

Stamp duty hikes are driving urgency among buyers and investors, emphasizing the need for strategic planning in London’s competitive property market. 

The availability of stamp duty-free homes varies widely across the UK, with most properties in London exceeding the threshold, while many in northern regions remain exempt. 

These changes may influence negotiation tactics, especially for properties priced near the threshold, as buyers and sellers seek to offset the increased costs. 

Remortgaging becomes a priority 

Homeowners whose fixed-rate mortgage deals are ending in 2025 will likely focus on remortgaging. Those who locked in low rates during 2020 may face higher repayments, while those with more recent, higher-rate deals could see costs decrease. 

A new remortgage rate tracker is helping homeowners monitor trends and explore options for their next deals. 

2025 is expected to be a mixed year for remortgaging, with rates dropping for some homeowners while others face higher costs after their current deals expire. 

London housing market poised for growth 

London’s property market has trailed the rest of the UK in price growth over recent years, with an average increase of 12% compared to the national 21%. 

London’s housing sector is predicted to see significant growth in 2025, thanks to renewed interest from global investors and a shift back to office-centric work environments. 

Experts anticipate London’s property prices will align with or surpass national growth rates in 2025, driven by higher demand and evolving buyer preferences.