Housing Market February 2025

A Promising Start with Increased Buyer Demand says the Zoopla House Index

The UK housing market has entered 2025 on a positive trajectory, showing encouraging signs of growth and stability. With house price inflation rising to 2.0% annually and a 13% increase in buyer demand compared to last year, the property sector appears more resilient than it has been in recent years. These early indicators suggest a robust market outlook, supported by increased activity from both first-time buyers (FTBs) and homeowners looking to move in the next two years. This blog explores the key trends driving the housing market and what buyers and sellers can expect in the months ahead within Harborne and Edgbaston.

Key Market Trends and Growth Indicators

1. Strong Sales Market Momentum into 2025
The housing market’s momentum from 2024 has carried over into 2025, despite concerns surrounding mortgage rates and economic uncertainties. Compared to last year, sales agreed are up by 12%, demonstrating an active market where buyers are keen to secure properties.

A significant driver of this activity is the increase in available properties. The number of homes for sale is now 10% higher than a year ago, with estate agents managing an average of 31 properties per branch—the highest January total in seven years. This rise in housing stock gives buyers more options and has contributed to a healthier balance between supply and demand.

2. House Price Growth and Affordability Trends
At the end of December 2024, UK house price inflation stood at 2.0%, a notable increase from -0.9% the previous year. This marks the fastest growth rate since April 2023 and highlights an improving housing market.

Despite inflationary pressures, housing affordability is showing signs of improvement. Earnings have been rising faster than house prices for the past two years, aided by mortgage rates stabilising in the 4-5% range. This trend is expected to continue, particularly in regions experiencing employment growth, such as Northern Ireland (7.7% house price growth) and the North West (3.2%).

3. Impact of the Stamp Duty Increase from April 2025
One of the most significant changes affecting the property market is the return to higher stamp duty rates set to take effect in April 2025. The increase will impact both existing homeowners and first-time buyers (FTBs), particularly those purchasing properties in the £300,000–£625,000 range.

As a result, FTB demand surged by over a third in late 2024, with many rushing to secure properties before the deadline. However, while it is now too late for new buyers to benefit from the lower rates before the increase, Zoopla’s research indicates that demand remains steady. The majority of FTBs—approximately 60%—will still pay no stamp duty after April, limiting the negative impact on overall market activity.

4. Regional Housing Market Performance
Regional variations in house price growth remain a key feature of the market. The fastest-growing areas in 2024 included:

• Wigan (North West England): 5.6% house price growth
• Motherwell (Scotland): 4.9% house price growth
• Northern Ireland: 7.7% house price growth (highest in the UK)

Conversely, Southern England is experiencing the slowest growth rates, with inflation below 1.5%. However, a recent rise in FTB demand in London and the South East is expected to provide some upward pressure on house prices in these regions over the coming months.

Buyer and Seller Sentiment in 2025

Consumer confidence in the housing market is improving, with more homeowners and renters expressing interest in purchasing property in the near future.

• 17% of homeowners are planning to move within the next two years.
• 25% of homeowners are monitoring market conditions, ready to act if favourable opportunities arise.
• Over 20% of renters are looking to buy, driven by rising rental costs and expectations of more affordable mortgage conditions in 2025.

The growing pool of potential buyers suggests that market activity will remain strong beyond the initial stamp duty-driven rush in early 2025.

Outlook for 2025: What to Expect?

The early months of 2025 provide a strong foundation for continued growth throughout the year. While mortgage rates remain a factor to watch, the following trends are expected to shape the market:

• House price growth will remain moderate, with a forecasted 2.5% increase for 2025.
• Sales volume is predicted to rise by 5% compared to 2024, reaching 1.15 million transactions.
• Rising incomes and potential base rate cuts will further improve housing affordability.

The UK property market is in a much stable position than in previous years, making 2025 an opportune time for buyers and sellers to explore their options.

Conclusion: Navigating the Housing Market in 2025

With the market off to a promising start, both buyers and sellers have an excellent opportunity to make informed decisions. Whether you’re considering moving soon or simply keeping an eye on market trends, staying updated with expert insights is key to making the right move at the right time.