A Strong Start

The UK housing market has entered 2025 on a positive note, with sales and demand showing significant growth, according to Zoopla's latest House Price Index. The property website reports a rise in sales agreed, in comparison to 2023 and 2024, as buyers make haste to complete purchases before higher stamp duties take effect in April 2025. This momentum is supported by increased housing inventory, a boost in demand, and modest house price growth across the country.

Strong Market Momentum Continues from 2024

Despite concerns over rising mortgage rates and lower consumer confidence, the UK property market has maintained its upward trajectory. The number of homes for sale is 10% higher than a year ago, leading to a more competitive market, with estate agents now listing an average of 31 homes per branch—the highest in seven years. As more properties become available, demand has surged by 13%, making 2025's start the most active since 2023.

Zoopla’s data indicates that the annual house price inflation in the UK stands at 2%, marking a significant recovery from the previous year when house prices were down by 0.9%. The average house price in the UK now stands at £267,700, a £5,200 increase over the course of 2024, following a £2,400 decline in 2023.

Regional Price Growth Trends

Regional trends indicate that house prices are growing fastest in the North, particularly in Northern Ireland (7.7%) and North West England (3.2%), where job growth has outpaced the national average. In these areas, local markets such as Wigan and Motherwell have seen particularly strong price growth.

In contrast, the southern regions of the UK—including London, the South East, South West, and Eastern England—are experiencing more modest price increases. In these areas, where home prices are already higher, affordability remains a challenge, and price growth has slowed to under 1.5% over the past year.

Impact of Stamp Duty Changes

A major factor influencing the housing market in 2025 is the upcoming increase in stamp duty, which will end temporary reliefs from April. This has driven an uptick in first-time buyer activity, particularly in price bands where stamp duty will increase significantly. Demand surged by over a third in late 2024 for homes in the £300,000 to £625,000 range, where first-time buyers will face higher tax bills after April.

For example, a first-time buyer purchasing a property for the average price of £420,000 in London will see their stamp duty rise from £0 to £6,000 from April, while in South East England, the increase will be from £0 to £1,625 for homes priced at £332,500. Despite the looming tax changes, experts do not anticipate a sharp drop in buyer demand after April, with many buyers already adjusting to the higher costs.

Rising Household Demand and Future Market Expectations

Zoopla’s data shows that UK households are increasingly looking to buy homes in the next two years. An increasing number of renters are considering buying, driven by rapidly rising rents and expectations that mortgage rates will decrease in 2025. A fifth of renters are now planning to make their first home purchase, making them the dominant buyer group moving forward.

Homeowners are also showing interest in moving, with 20% indicating plans to do so in the next two years. However, many remain cautious and are keeping an eye on the market as they wait for conditions to improve further.

What to Expect in 2025

Looking ahead, Zoopla predicts that house prices will rise by 2.5% in 2025, with sales expected to increase by 5%, reaching around 1.15 million transactions. Rising incomes, expected base rate cuts, and a healthy inventory of homes will support affordability and overall market sentiment. Although the increase in stamp duty for some buyers could temper price rises, overall market activity remains strong.

2025 has started off stronger than 2024 and 2023, with a healthy outlook for the rest of the year. Rising demand, a greater supply of homes, and gradual price increases are likely to characterise the market, despite higher stamp duty costs and challenges related to mortgage rates.

Why Choose Fuller Gilbert?

With a passion for property & a commitment to delivering exceptional service, Fuller Gilbert & Company estate agent provides a comprehensive property sales, lettings and management service, with emphasis on quality, transparency and customer satisfaction.Whether you’re buying, selling, renting or investing, Fuller Gilbert combines in-depth local knowledge with a tailored approach to ensure every transaction is smooth and successful.

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For more information about Fuller Gilbert & Company, or to discuss your property requirements, Please call 020 7581 0154, email: info@fullergilbert.co.uk or send a message via the contact form on our contact page.