After the holiday break, this short week served as a time for sober reflection and looking ahead to the year to come. The consensus among lenders and estate agents is that house prices are inching closer to the peaks of 2022 but still have some ground to cover. To offset the lack of economic growth, UK interest rates are expected to see a reduction or two, perhaps even three, throughout the year. However, inflationary pressures could delay delivery times. For first-time buyers and landlords eager to act or sell, the early months of 2025 will be busy as they scramble to beat the stamp duty deadline on March 31st. By year-end, assuming interest rates improve and affordability follows suit, market activity should pick up, making the start and end of the year busy, and the middle sluggish. Welcome to another, UK Property News Recap – 03.01.2025
The house price winners and losers in 2024
According to Halifax, seven of the 10 areas in the UK which suffered the biggest price falls in 2024 were in the capital.
Buyers were forced to shun expensive and central locations in favour of more affordable areas which stoked house price growth while simultaneously stubbing out growth in more established and pricey areas.
Ealing saw a decline of nearly 5%, while Westminster experienced a 3.5% drop. On the flip side, places like Stoke-on-Trent and Slough saw notable increases, with prices climbing 17.2% and 15%, respectively.
The Rightmove Boxing Day Scroll
Sellers entered 2024 hoped for a rebound from the previous year, but many found their homes still falling short of their 2022 price expectations. Hopes high, 46% of sellers looking to move up the ladder believed the Rightmove Boxing Day doom-scrolling hype and listed.
They hoped that recent reports of general price growth and rate cuts would push buyers to commit to their New Year’s resolutions of moving up.
The areas hardest hit by price declines, generally those down south, were the most prolific listers. Smaller properties, aimed at first-time buyers, made up 36% of new listings, while seasoned homeowners at the top of the ladder were more cautious, with only 18% opting to list, many holding off until spring.
Not only do we have to put up with politicians but we also have to pay to put them up
The i Paper revealed the growing costs of MPs’ council tax claims, which rose from £480,000 to £506,000 in 2023-24. Since 2019, taxpayers have shelled out £2.6 million on council tax for MPs’ rented properties. Another questionable outgoing borne by the taxpayer, funding those not in need.
Hamptons claim a London 2025 bounce back
Off the back of presumed rate adjustments, increasing affordability, the estate agent Hamptons forecasted house prices would rise by 3% across Britain in 2025, followed by 3.5% in 2026 and 2.5% in 2027. In London, they believe house prices could see 4% growth in the fourth quarter of 2025, outperforming other areas in the UK.
Stamp Duty stampede
Many news outlets reported a buying rush from first time buyers at the start of the year. These young hopefuls are set on trying to complete before the March 31st deadline when the stamp duty threshold reduces from £435,000 to £300,000. To coincide with this, landlords are looking to make hay and offload, stocking the portal shelves. The influx in stock could help stabilise prices but good stock, where there is multiple interest, will fly off the portal shelves if priced right.
Either way, those looking to sell should fear the aftermath as this is when this section of the market will stall and buyers will expect further discounts to compensate for the additional expenditure.
Growth vs Wages and Inflationary Pressures. 2025 will be spent trying to balance these opposing forces
51 economists placed their bets on base rate cuts in the Times annual poll, the majority believe the base rate will fall to at least 3.75%, implying four quarter-point rate cuts this year.
35% said the base rate would be lowered to 3.75%, 15% said it would drop to 3.5% and three said the Bank would be forced to cut it to 3.25% over the next 12 months. The remaining 22 respondents said the base rate would be lowered to between 4 per cent and 4.25%. If the past few years have taught us anything it is that nothing is certain.
Nationwide reflects on the year just gone
Nationwide’s December report showed a modest 0.7% rise in UK house prices, bringing the average home value to £269,426. Annual growth stood at 4.7%, driven by price increases in more affordable regions like the North and Northern Ireland. Despite this uptick, prices are still below 2022 levels. “Moving forward”, Nationwide expects moderate growth in 2025, dependent on economic and inflation activity.
Money and Credit – November 2024
The Bank of England’s November Money and Credit report indicated buyers were becoming more cautious while the rate on outstanding mortgages rose to 3.80%. Net mortgage approvals for house purchases fell by 2,400, dropping to 65,700, while remortgaging also saw a slight dip, down by 300 to 31,200 in November 2024. This decline in both new purchases and remortgages reflects the ongoing rate uncertainty, which appeared to be deterring potential movers, at least in the short term, from committing to a move.
And that concludes another UK Property News Recap – 03.01.2025. If you have any comments or suggestions, please get in touch.
