The UK Property Market: A Reflection in 2024 and Projections for 2025
The UK property market faced numerous challenges throughout 2024, marked by a volatile economic landscape, geopolitical events, and evolving consumer behaviour. As 2025 approaches, there are positive signs of recovery, but caution remains essential for those navigating the market.
The Year That Was: Key Trends in 2024
A Rollercoaster Year
2024 continued the turbulence seen in 2023. The general election, resulting in the first Labour-led government in 14 years, coupled with the ongoing war in Ukraine and a high cost of living, created a complex environment for property buyers, landlords, and brokers. Interest rate fluctuations and rapid changes in swap rates further complicated decision-making.
Although the Bank of England implemented two interest rate cuts in August and November, boosting market confidence, inflation concerns persisted. Mortgage approvals reached a high of 68,000 in October—the strongest since August 2022—signalling tentative recovery.
Challenges in the Sales Market
The year began with stagnation in high-value areas like London, where house prices fell, particularly in the Southeast. However, by the year’s end, there were signs of recovery:
Annual house price growth reached 1.9% in November 2024, compared to a decline of 1.2% in the previous year.
The average UK house price stood at £267,500, with regional disparities: 0.7% growth in the Southeast, contrasted with 6.8% in Northern Ireland.
The sales pipeline for early 2025 is robust, with 283,000 sales worth £104 billion underway.
Strength in the Rental Market
Affordability pressures and high interest rates drove strong demand in the rental sector. However, a 2% increase in stamp duty for landlords could reduce the supply of affordable rental properties. Small-scale landlords may face additional pressures, potentially exacerbating supply shortages.
The Housing Delivery Gap
Labour’s ambitious goal to build 1.5 million homes by 2030 faces significant obstacles. A lack of progress in planning reform and land availability has hampered efforts, with projections suggesting a shortfall of up to 475,000 homes by 2030. In 2024, housing starts plummeted by 60.3% in Q2 compared to the previous year, emphasizing the urgency for action in 2025.
First-Time Buyers: A Mixed Picture
For first-time buyers, 2024 presented both opportunities and challenges:
Affordability concerns remained a significant barrier, with 44% delaying purchases.
The end of the Help to Buy scheme in 2023 left many buyers without viable alternatives, highlighting the need for new, effective schemes.
Changes in stamp duty provided temporary relief but failed to address long-term affordability.
Looking Ahead: Predictions for 2025
Moderate Growth Expected
Zoopla forecasts a 2.5% increase in house prices in 2025, with sales projected to rise from 1.1 million in 2024 to 1.15 million. Regional disparities will persist, with higher growth in Northern Ireland and the Northwest, driven by relative affordability, while southern regions may see more modest gains.
The Importance of Caution
Despite positive signs, buyers and sellers must remain cautious:
Mortgage rates are expected to stay elevated, influencing price sensitivity.
Economic uncertainty, including inflation and unemployment, could impact demand.
The gap between asking and agreed prices—currently at 3.6%—indicates buyers’ cautious approach.
Potential Regulatory and Economic Shifts
The Future Homes Standard (FHS), effective 2025, will increase construction costs by £15,000-£18,000 per home, requiring developers to adapt.
Interest rate cuts, if realised, could spur market activity, but inflationary policies may delay their implementation.
Prime London Market Outlook
The prime London market remains uncertain. While October 2024 saw a 30% increase in exchanges due to stamp duty changes, November’s 19% decline highlights lingering hesitancy. Overseas investment may be affected by changes to tax regimes, further complicating recovery.
Conclusion
The UK property market in 2025 holds promise but demands prudence. Buyers, sellers, and investors must stay informed and adaptable, balancing optimism with caution as the economic and regulatory landscape evolves. Addressing long-term challenges, such as housing supply and affordability, will be crucial to ensuring a sustainable recovery.
Britain’s quickest markets: | ||||
Area | Region | Average time to find a buyer (days) | Change in time to find a buyer (days) compared to last year | Average asking price |
Carluke | Scotland | 15 | -3 | £170,468 |
Giffnock | Scotland | 16 | -3 | £363,881 |
Uddingston | Scotland | 17 | -4 | £219,481 |
Renfrew | Scotland | 18 | -3 | £160,664 |
Falkirk | Scotland | 18 | -2 | £158,181 |
Grangemouth | Scotland | 19 | -7 | £122,556 |
Bellshill | Scotland | 21 | -5 | £125,937 |
Clarkston | Scotland | 21 | -5 | £276,715 |
Wishaw | Scotland | 21 | -6 | £133,747 |
Kilmarnock | Scotland | 21 | -5 | £132,117 |
Britain’s quickest markets outside of Scotland | ||||
Area | Region | Average time to find a buyer (days) | Change in time to find a buyer (days) compared to last year | Average asking price |
Whitehall | Southwest | 25 | 0 | £349,376 |
Moston | Northwest | 26 | -16 | £195,992 |
Downend | Southwest | 29 | -3 | £410,535 |
Heaton | Northeast | 30 | 2 | £224,444 |
Whitehaven | Northwest | 30 | -14 | £164,324 |
St. George | Southwest | 30 | 2 | £315,050 |
Levenshulme | Northwest | 30 | -17 | £243,423 |
Alvaston | East Midlands | 32 | -2 | £192,432 |
Walkley | Yorkshire and The Humber | 33 | 8 | £234,549 |
Meanwood | Yorkshire and The Humber | 33 | -5 | £290,275 |
Britain’s slowest market | ||||
Area | Region | Average time to find a buyer (days) | Change in time to find a buyer (days) compared to last year | Average asking price |
Brixham | Southwest | 118 | 12 | £338,011 |
Skegness | East Midlands | 115 | 39 | £197,845 |
Sandown | Southeast | 109 | 36 | £252,908 |
Abergele | Wales | 106 | 32 | £231,701 |
Minehead | Southwest | 103 | 24 | £298,345 |
Bessacarr | Yorkshire and The Humber | 100 | 21 | £270,464 |
Cleethorpes | Yorkshire and The Humber | 99 | 25 | £176,334 |
Canford Cliffs | Southwest | 99 | 22 | £1,223,116 |
Hayling Island | Southeast | 99 | 3 | £424,135 |
Barton-On-Sea | Southeast | 98 | 38 | £568,707 |
London’s quickest markets | ||||
Area | Borough | Average time to find a buyer (days) | Change in time to find a buyer (days) compared to last year | Average asking price |
Walthamstow | Waltham Forest | 32 | -4 | £553,534 |
Stoke Newington | Hackney | 40 | -10 | £769,966 |
Dagenham | Barking and Dagenham | 42 | -6 | £359,634 |
Leyton | Waltham Forest | 43 | -3 | £575,493 |
Snaresbrook | Redbridge | 44 | -3 | £595,709 |
Forest Hill | Lewisham | 44 | -6 | £582,630 |
Highbury | Islington | 44 | -4 | £896,423 |
Chessington | Kingston upon Thames | 45 | 15 | £484,199 |
Eltham | Greenwich | 45 | 1 | £492,882 |
Woodford | Redbridge | 46 | -11 | £646,526 |
London’s slowest markets | ||||
Area | Borough | Average time to find a buyer (days) | Change in time to find a buyer (days) compared to last year | Average asking price |
Knightsbridge | Westminster | 135 | 24 | £4,011,734 |
Chelsea | Kensington and Chelsea | 108 | 18 | £1,850,264 |
Victoria | Westminster | 100 | 5 | £1,400,369 |
Heston | Hounslow | 95 | 17 | £506,947 |
Kingsbury | Barnet | 94 | 17 | £501,561 |
Kensington | Kensington and Chelsea | 91 | 0 | £2,152,791 |
Stanmore | Harrow | 88 | -5 | £732,510 |
Finsbury | Islington | 87 | 8 | £894,920 |
Brentford | Hounslow | 86 | 6 | £529,183 |
Cricklewood | Brent | 85 | 3 | £660,459 |
Regional view | ||||
Region | Average time to find a buyer (days) | Change in time to find a buyer (days) compared to last year | ||
Scotland | 33 | 1 | ||
Northeast | 52 | 4 | ||
Northwest | 58 | 0 | ||
UK | 60 | 3 | ||
West Midlands | 60 | 4 | ||
Yorkshire and The Humber | 61 | 3 | ||
London | 63 | 0 | ||
Southeast | 63 | 2 | ||
Southwest | 64 | 7 | ||
East of England | 65 | 4 | ||
Wales | 66 | 2 | ||
East Midlands | 67 | 6 |
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