UK Property Set to Become a Buyers’ Market in 2025, Analysts Say
UK Property Set to Become a Buyers’ Market in 2025, Analysts Say.
A forecast of 'cautious optimism' emerges despite the conclusion of significant stamp duty relief and concerns regarding potential increases in taxes and interest rates.
Experts have forecasted a transition to a "buyer's market" for prospective homebuyers in the upcoming year, which will enhance their negotiating leverage as the sentiment within the housing market evolves towards a state of "cautious optimism."
Nevertheless, even the more optimistic projections for 2025 are tempered by caution, particularly due to the impending expiration of significant stamp duty relief for first-time buyers in the spring, alongside the potential impact of elevated interest rates and taxes on the market.
Aneisha Beveridge, the head of research at the property firm Hamptons, remarked, “As the end of 2024 approaches, the mood of the housing market has shifted from trepidation to cautious optimism.
“Lower mortgage rates have been the principal catalyst for change, falling much more rapidly than we had expected. House prices are moving upwards, reversing the declines of 2023. Yet, while the future direction of interest rates seems to have been mapped out, the pace of this journey and its ultimate destination remain uncertain.”
Hamptons anticipates a 3% increase in house prices across Britain in 2025, followed by a 3.5% rise in 2026 and a 2.5% increase in 2027, as the overall affordability situation improves.
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The upcoming year may also signify the onset of a "new housing cycle," during which London is expected to surpass the performance of other regions in the country. According to Hamptons' housing market forecast, London is projected to experience a 4% price growth in the fourth quarter of 2025, marking the first time since 2015 that it outperforms other areas.
Tim Bannister, a property expert at Rightmove, noted that this trend would be “driven partly by some major companies mandating a return to permanent office working.
“We think 2025 will continue to be a buyer’s market, which could provide buyers with more negotiating power, given the number of available properties per estate agent is at a decade-high for this time of year.
“There’s less competition amongst buyers than during the pandemic markets, which could provide them with some breathing room to choose the right home at the right price.”
Rightmove has reported its most active Boxing Day to date in terms of new seller engagement, with an unprecedented number of properties being listed for sale by agents.
On December 26, total buyer interest, gauged by the volume of inquiries directed to estate agents regarding available homes, surged by 20% compared to the same day in 2023. This increase reflects potential buyers taking advantage of a wider selection ahead of anticipated moves in 2025.
Transaction volumes were projected to rise, mirroring the trends observed in 2024, largely driven by first-time buyers, who represented a record 31% of all sales. Nevertheless, the impending changes to stamp duty in April may lead to a "distorted" market, as buyers may rush to complete purchases before the new regulations take effect.
Hamptons’ forecast continued: “While there might be a slight uptick in transactions just before these changes take effect, the overall impact is not expected to cause a significant rush as the potential savings for most movers will be relatively small.
“Overall, affordability is expected to remain the key determinant of the market’s direction, with incomes set to outpace inflation for the second year running, encouraging those who had been deferring relocation to consider moving.”
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The forecast for the UK property market in 2025 brings a sense of cautious optimism, with a shift toward a buyer’s market offering increased negotiating power. Lower mortgage rates, combined with a 3% rise in house prices, signal a positive recovery after the challenges of 2023. London is expected to lead this growth, outpacing other regions for the first time in nearly a decade.
As affordability improves and first-time buyers continue to drive the market, there’s a renewed sense of confidence. With more properties available, 2025 presents a promising opportunity for buyers seeking the right home at a competitive price.
