2025's Housing Market at a Glance

As we gear up for 2025, the UK property market is set for a period of modest growth and a bit more stability. However, there will be some regional differences and new regulations that could change the game for buyers, sellers, and renters alike.

When it comes to house prices—always a hot topic—expect to see some moderate increases. Rightmove is predicting a 4% rise in average asking prices, while Halifax is taking a more cautious approach with estimates between 0% and 3%. These numbers suggest we might be moving away from the wild price hikes of recent years, which could be good news for those who have been priced out of the market.

The rental market in the North is thriving. With strong tenant demand and high rental yields, areas like Manchester and Liverpool are becoming increasingly popular among investors. The North West has seen a surge in mortgaged homebuyers, reflecting an appetite for property in this region. As mortgage rates have begun to decline, confidence in the market has returned to more normal levels, further boosting buyer enthusiasm.

Moreover, ongoing regeneration projects across northern cities are enhancing their appeal. Significant investments in transport and infrastructure have transformed areas like Stockport and Oldham, leading to improved amenities and increased desirability. This regeneration not only elevates property values but also attracts a diverse range of residents looking for vibrant communities.

Savills is forecasting a 3.5% increase in rental prices, and Zoopla suggests that more affordable areas might see even sharper rises. This ongoing pressure on renters highlights the urgent need for policy changes to tackle the UK’s housing crisis, especially since homeownership remains out of reach for many.

The rental scene is about to undergo some significant changes with the introduction of the Renters Reform Bill. This new legislation will put an end to Section 21 “no-fault” evictions, strengthen the Section 8 process, and require landlords to register. While these changes aim to give tenants more security, they might also lead some landlords to exit the market, which could worsen supply issues.

On the sales front, we can expect transaction volumes to bounce back. Predictions suggest around 1.2 million property sales in 2025—about a 9% increase from 2024. This uptick indicates a return to a more “normal” market after years of ups and downs, with estate agents describing the upcoming environment as “challenging,” “balanced,” and “competitive.”

First-time buyers might catch a break in 2025, as mortgage rates are expected to drop, making homes a bit more affordable. However, this group will still face significant hurdles like high deposit requirements and strict lending criteria. The government’s approach to schemes like Help to Buy and any potential changes to stamp duty will be crucial in determining how accessible homeownership becomes for these buyers.

The broader economic picture will also play a big role in shaping the property market. Ongoing inflation and interest rates will impact buyer confidence and lending practices. Everyone will be keeping an eye on what the Bank of England decides in the lead-up to 2025.

With our eyes fixed on 2025, it’s clear that the UK property market is entering a new phase. The days of double-digit price growth may be behind us, giving way to a more sustainable—and perhaps less exciting—pattern of modest increases. This cooling trend brings opportunities for some but challenges for others, especially renters.

Policymakers have their work cut out for them in addressing key issues like housing affordability and supply. If meaningful changes aren’t made, there’s a risk that the property market in 2025 will continue to widen societal inequalities, leaving many dreaming of homeownership without any real chance of achieving it.

As we step into this new era, it’s essential that we see property not just as an investment but as homes—the backbone of communities and individual well-being. Only by changing our approach to housing can we hope to create a market that benefits everyone rather than just a lucky few.

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