The Property Market Reset in Harborne & Edgbaston

The first quarter of 2025 provided a clear window into how the UK housing market is adjusting to a complex economic backdrop. Following a period of policy shifts, including the reintroduction of pre-pandemic stamp duty thresholds, alongside evolving inflation and interest rate dynamics, the market has demonstrated resilience.

Rather than a slowdown, we’ve observed early adaptation from buyers and sellers alike. Encouraging transaction volumes, increased listings, and signs of pricing discipline suggest the sector is recalibrating with pragmatism rather than retreat. Below, we examine the key trends that emerged across Q1 and what they reveal about the direction of the property market for the remainder of the year.

National Market Performance: Q1 2025 in Numbers

The housing market in Q1 2025 delivered a broadly positive performance across several key indicators:

Properties for Sale: Up 7.67% year-on-year
New Listings: Up 3.23% year-on-year
Sales Agreed: Up 14.6% year-on-year
Price Changes: Up 19.05%
Withdrawals: Down 22.81%

The uplift in sales agreed and listings suggests that many—particularly motivated buyers—moved early to secure deals ahead of the anticipated stamp duty deadline in April. These figures underscore that the market was not deterred by upcoming policy changes, but rather reacted with decisiveness.

Stamp Duty Deadline: Temporary Disruption, Long-Term Stability

The stamp duty relief rollback, implemented from 1st April, triggered a significant flurry of activity in the run-up to the deadline. Data showed a 92% spike in moves during the final week of March—a dramatic increase even by seasonal standards.

Despite this urgency:

Only one in eight buyers surveyed indicated they would withdraw if they missed the deadline, according to data from Barclays Property Insights
A majority of agents anticipated only minor fallout, with many buyers opting to adjust budgets or location preferences rather than exit the market entirely.

As has been seen in previous cycles of fiscal change, transaction volumes may soften temporarily in Q2. However, historical patterns suggest this is typically followed by a period of stabilisation and resumed growth, particularly if broader economic conditions remain supportive.

Mortgage and Interest Rate Environment

Despite marginal month-on-month declines in February, mortgage approvals were up 8.26% year-on-year, reflecting sustained underlying demand.

At the time of writing this article, key interest rate benchmarks for borrowers were as follows:

Average two-year fixed rate: 4.87%
Average five-year fixed rate: 4.73%

Interestingly, Barclay’s have reported a growing proportion of borrowers selecting shorter-term fixed deals, anticipating potential reductions in base rates later in the year. Lenders have responded proactively, with institutions like Santander and Accord introducing more flexible affordability criteria and enhanced incentives, particularly for first-time buyers affected by the new stamp duty thresholds.

Affordability and Buyer Confidence

Affordability pressures remain a consideration. The average mortgaged homeowner is now paying approximately £12,754 per year, a rise of 28.5% since 2022. Nevertheless, several counterbalancing factors are helping to sustain market momentum:

Buyer confidence rose to 30% in Q1—its highest point since October 2024.
Joint income borrowing structures and longer mortgage terms are enabling continued access to the market.
Households have generally adjusted to the higher rate environment, and affordability is beginning to align more closely with pre-pandemic norms.

Market Outlook for 2025

The UK property market remains firmly in a growth phase, albeit a more measured one. In Q1:

House prices increased by 3.9%
Annual growth for 2025 is projected at 2.8%, broadly in line with earnings
The market expanded in transactional value, with £22.3 billion more spent on home purchases in 2024 compared to 2023

Although higher interest rates and inflationary concerns remain, current indicators suggest a broadly positive trajectory. Transaction volumes are increasing, and housing stock turnover is gradually returning to historical norms. With planning reforms anticipated to add further housing supply later in the decade, competitive dynamics are likely to evolve further—but for now, demand continues to outpace supply in many segments.

Strategic Realignment, Not Retraction

Q1 2025 has shown that the UK housing market is not just weathering uncertainty—it’s adapting to it. Buyers acted decisively ahead of fiscal deadlines. Sellers have responded with greater pricing flexibility. And lenders are adjusting their strategies to support both sides of the transaction.

While increased stock and higher borrowing costs may place downward pressure on prices in certain areas, confidence levels, transaction volumes, and overall market liquidity point to a stable and active market in the months ahead.

The narrative has shifted from speculation about market crashes to a more balanced reality: a property sector driven by strategic behaviour, realistic pricing, and long-term planning.

At McHugo Homes, we believe 2025 continues to offer real opportunity for those looking to move within Harborne and Edgbaston, but success comes down to strategy.

With buyer confidence steady and mortgage rates stabilising, it’s a good time to act. That said, with more choice on the market, buyers are more selective, so standing out is key.

Our advice?

Start with an accurate, up-to-date valuation—not yesterday’s market, but today’s
Be realistic on price to avoid sitting unsold
Make sure your marketing is exceptional to present your home in the best light
And most importantly, stay informed with local insights that matter

We’re here to help you navigate the market with clarity, confidence, and the right plan for your Harborne or Edgbastonhome.

For more information on anything discussed in this article, contact us on 0121 5170251.