2025 UK Property Market: Steady Foundations & Growth Ahead

 

As we move further into 2025, the UK property market is beginning the year with strong foundations, and the outlook remains positive. Activity levels are expected to improve as the year progresses, and price growth forecasts for 2025 (3.1%) and 2026 (3.7%) are in line with the growth seen in 2024.

Following a period of weaker market conditions from late 2022 to early 2024, mortgage approval and transaction rates have returned to more normal levels. Recent interest rate cuts have also boosted market sentiment, providing a renewed sense of optimism. That said, with persistent inflation above target, interest rate reductions by the Bank of England are expected to remain slow and measured.

Looking ahead, longer-term mortgage rates are anticipated to stabilise around 4%, with the current 5-year swap rate at 4.0%. In terms of price growth, affordability will play a key role—especially in pricier regions like the South East and London, where price sensitivity will continue to be a factor for the foreseeable future.

However, one of the biggest opportunities for the sector in 2025 lies in the new build market. With the government taking active steps towards meeting its house-building targets, this could provide a significant boost to housing supply and create new opportunities for both buyers and investors.

While challenges remain, there’s no doubt that 2025 has strong potential for growth, and the outlook for the UK property market is heading in the right direction.

Rising Mortgage Approvals as Buyers Rush Ahead of Stamp Duty Change

 

Mortgage approvals in January were 18% higher than the same time last year, as buyers look to secure properties before the stamp duty nil-rate threshold drops from £250,000 to £125,000 in April. The stamp duty cut, which is set to expire at the end of the month, has prompted a surge of activity in the property market as buyers attempt to beat the deadline and avoid the added costs.

Although the market is currently experiencing this uptick, experts predict that activity may slow down after the April deadline. With higher stamp duty rates coming into effect, the market may quieten somewhat in the months that follow. However, indications suggest that the overall demand remains modestly on the rise, even for properties unlikely to complete before the deadline.

According to the latest RICS UK Residential Market Survey, agents report rising levels of market appraisals compared to a year ago. They also anticipate a slight increase in transactions in the near future, despite the looming economic uncertainty. While market sentiment remains cautious, with concerns about inflation and mortgage rates, there is a sense that demand is holding steady, especially in the short term.

As buyers continue to rush to finalize deals, the increased activity is driven not just by the impending stamp duty change, but by the broader economic factors at play. While many may take advantage of the stamp duty cut, others may be deterred by rising inflation and mortgage rates, which could impact their purchasing decisions as the year progresses.

In summary, the property market is currently buoyed by a stamp duty rush, but with higher costs expected in the coming months and economic uncertainty still lingering, it remains to be seen how demand will evolve in the latter part of 2025.

 

Thinking of Moving Home in Northampton? Here’s Where the Bigger Homes Are

 

If you're considering a move and space is a top priority, understanding where larger Northampton homes are clustered can be incredibly useful. The map above highlights the distribution of four-bedroom (or larger) properties across the local Northampton market, giving a clear picture of where they are more commonly found.

Larger Northampton homes often appeal to growing families, those needing extra space for home offices, or buyers looking for long-term flexibility. On the flip side, if you already own a spacious Northampton home and are thinking of downsizing, knowing where demand for bigger properties is highest can help you plan your next steps.

By keeping a close eye on market trends and property availability, we aim to make moving home as straightforward as possible. Whether you’re upsizing, downsizing, or just curious about what’s happening in the local Northampton property market, it always helps to have the right insights at the right time.

If you’re wondering what your home might be worth in today’s market, or what’s available that suits your needs, we’d be happy to help. Call us on 01604 626 626 for informal chat.

The UK Property Market Update - week ending 23rd February 2025

 

✅ Listings (New Properties on the Market)

35.8k new listings this week (last week 36.1k)

That’s 9% higher than Week 7 of 2024 YTD and 9.2% higher YTD compared to 2017/18/19.

✅ Price Reductions (% of Resi Stock)

20.6k Price Reductions this week - meaning an approx run rate of 1 in 8 of Resi Sales stock per month is being reduced (12%).

For comparison, 11.9% average in 2024, though the long-term 5-year average is 10.6%.

✅ Total Gross Sales (Agreed Sales)

27.4k UK homes sold STC this week, slightly down from 27.6k last week in Week 6

That’s 20% higher YTD compared to 2024 and 28% higher than 2017/18/19 YTD levels.

✅ Sale-Through Rate (Monthly in Arrears)

January’s Run rate of 15% of Resi stock sold stc. For comparison, 13.9% of residential sales stock sold in January 2025. 2024 monthly average: 15.3%. Long-term 8-year average: 17.9%.

✅ Sale Fall-Throughs

6,027 Sale fall-thrus last week from Resi Sale Sales Pipeline of 440,431 homes sale agreed (sold stc).

Another method is that week’s sale fall thrus as a % of gross sales that week. This week, that is 22% (last week 22.2%). Still below the 7-year average of 24.2%, and well below the 40%+ levels post-Truss Budget (Autumn 2022).

For January ’25 as a whole, 6.03% of sales in the UK agents pipelines fell thru in Jan 25. For comparison, 2024 average: 5.36%.

✅ Net Sales (Gross sales for the week less Sale Fall Thrus for the week)

21.3k net sales this week, compared 2025 weekly average of 20.6k.

2025 YTD is 17% higher than compared to 2024 YTD and 22% higher than YTD 2017/18/19.

✅ Residential Sales Stock on the Market

660k properties on the market at the end of January 2025 (up, as expected, from 605k in December).

Historical comparison for end of January :

• 2024: 612k
• 2023: 525k
• 2022: 373k
• 2021: 538k
• 2020: 591k
• 2019: 614k
• 2018: 540k
• 2017: 525k

✅ Residential Sales Sold STC Pipeline

440k sales agreed but not yet completed at the end of January 2025.

Historical comparison for January :

• 2024: 354k
• 2023: 347k
• 2022: 447k
• 2021: 459k
• 2020: 308k
• 2019: 290k
• 2018: 282k
• 2017: 270k

✅ UK House Prices (£/sq.ft)

As always, the £/sq.ft metric predicts Land Registry figures 5 months in advance with 92% accuracy (the orange line of the graph).

January’s final figure: £342/sq.ft.

• December ’24 : £339/sq.ft
• August ’24: £334/sq.ft
• January ’24: £330/sq.ft

This means UK house prices have risen 3.64% in the last 12 months.

If you would like to chat to us about our local property market, feel free to call us on 01604 626 626 or drop us a line at northampton@belvoir.co.uk