The Property Market in 2025
Posted on 28th December 2024 at 10:53
HOUSE PRICES
UK house prices are on track to edge higher over the whole of 2024, a sign that the housing market is remaining resilient. But what will happen next year and beyond?
The Office for Budget Responsibility (OBR) central forecast is that house price growth will fall back marginally from 1.7% in 2024 to 1.1% in 2025. House price growth then averages around 2.5% from 2026 until the end of the forecast [2030] supported by nominal earnings growth. The OBR said in a statement: “Average house prices remain above our March forecast, driven by the recent resilience and our forecast for higher nominal incomes. This would leave the average house price in the UK at £310,000 in 2028, around 2.5% higher than our March forecast.”
Halifax recently stated that they expect house price growth in 2025 to be anything up to 3% whilst Nationwide suggested anything between 2% and 4%.
PRICE REDUCTIONS
According to data from TwentyEA there have been almost one million price reductions in 2024, the largest number on record. This number is 8.1% higher than 2023 and 17.6% higher than 2019.
With over 400 properties in Gloucester currently having been for sale for at least 10 weeks or more it would appear that the start of the year is going to see plenty more reductions before some homeowners can accept an offer and hope to move forward with their plans.
MORTGAGES
UK Finance published (16th December) its housing and mortgage market forecasts for 2025 and 2026.
The latest forecasts come as mortgage rates are expected to fall below 4% early next year with two-year rates likely to follow later in the year and with that the outlook for 2025 is for a gradual improvement in mortgage affordability.
Over the past week major mortgage lenders including NatWest, Santander and Barclays all lowered their mortgage rates despite the Bank of England keeping the base rate on hold. These lower rates are expected to continue into 2025 with sub 4% borrowing likely.
The next Bank of England monetary policy meeting is 6th February 2025.
SOLICITORS
Another reminder to encourage you to instruct a solicitor at the very start of your home moving journey.
Do not wait until you have an offer on your current house or have an offer accepted on your new one. Engage with your chosen firm immediately and let them do all the initial work and requirements to make sure you are sale and purchase ready (look out for future article regarding this).
Careful who you choose. Buying and selling a home is the most expensive thing most of us will ever do so saving a few hundred pounds and going with a firm whose review score and testimonials are poor in comparison to a slightly higher priced alternative can never be a good idea.
STAMP DUTY
A reminder that changes to stamp duty thresholds will affect all buyers when they come in to force on the 1st April 2025 so it is likely that there will be a clamour to complete on or before the 31st March deadline to avoid increased tax bills. For those who have not yet started the process of buying a home then you need to hit the ground running if you are to have any chance of taking advantage of the current levels.
SUMMARY
With interest rates likely to fall slightly and house prices certain to go up be careful waiting too long for the rates to fall. Any small saving on your monthly payments could easily be eaten up by the increase in value of house you are buying and remember if you do secure a mortgage offer you can often change it prior to exchange of contracts if a better deal comes along.
The year ahead looks set to be a busy one for the property market so if 2025 is the year you are looking to move then our advice would be to start early.
If you haven’t already got your property valuations booked, then get these booked now for as soon as you can. Speak to your financial advisor to start to understand how much you may be able to borrow and instruct a solicitor to act on your sale so that they can get the ball rolling in preparation for when a buyer is found. This last point can shave several weeks off of the process overall.
For those that have secured a buyer but not yet found their new home it may be worth expanding your search. Try increasing the area you are looking (there may be a property 0.1 miles further out you have missed), increase your budget and see what has been on the market a long time and try an offer and finally cut down your requirements to your absolute must haves.
Whatever your plans we are here to help and we wish you all the best of luck. It can be daunting and stressful but it should also be an enjoyable and exciting time so if you have any questions or require any assistance please feel free to call us on 01452 260993, message us, or email enquiries@rbwalters.co.uk
Our look back at the Gloucester property market in 2024 will be available in the coming days and all our blogs and articles can be found on our website.
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