In the latter part of 2024, the UK housing market experienced robust sales momentum, driven largely by higher disposable incomes and easing rates on some mortgages. What can we expect for the housing market as we enter 2025? 

Last year marked the highest level of new sales since late 2020, with house prices rising modestly at just 1% year-on-year¹. This restrained price growth was partly due to a wide selection of available properties and ongoing affordability concerns limiting buyer spending power. 

Regional variances persisted, with stronger price growth in more affordable regions. Notably, house prices rose in Northern Ireland (5.6%), Scotland (2.4%), and North West England (2.3%), while prices dipped slightly in the South East (-0.1%) and Eastern England (-0.3%). In November, data suggested that UK house prices overall were likely to be around 2% higher across the year. 

Substantial sales pipelines  

According to Zoopla, there was a substantial sales pipeline towards the end of 2024. This was valued at £113bn, the largest in four years, with over 306,000 properties in the purchase process - 26% more than the previous year. First-time buyers (FTBs) were the most active buyer group in 2024, motivated by reduced mortgage rates, making homeownership more affordable compared to renting. In fact, the average mortgage repayment in October 2024 was 17% cheaper than renting, a stark contrast to just a 2% difference in October 2023. 

Surge expected in Q1 

Going into 2025, it’s expected that the housing market in England may experience a surge in early transactions due to the end of a temporary Stamp Duty relief confirmed in the Autumn Budget. With Stamp Duty thresholds set to revert to previous levels on 31 March, analysts predict a rush to complete purchases in the first quarter, potentially followed by a slowdown in activity as demand tapers. The coming months are expected to see a continuation of strong sales momentum, but the market’s trajectory beyond early 2025 will likely depend on evolving economic conditions and affordability trends. 

¹Zoopla, 2024 

As a mortgage is secured against your home, it could be repossessed if you do not keep up mortgage repayments.

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