New year, new market?
Happy New Year!
I hope you all enjoyed some time to relax with friends and family over the festive period. I know it feels like a distant memory now!
I love the start of a new year. There’s no better time to set goals, review the past 12 months, and even try to predict what might happen over the coming months. I’ll have more on my goals for 2025 in the next edition of my blog but for now I want to focus on the wider property market.
Read on for some predictions for the year ahead and some statistics on 2024…
“And now we welcome the new year. Full of things that have never been.”
As we ended 2024, Nationwide released their latest House Price Index (HPI) data, showing a ‘strong end to the year for UK house prices’. Their figures show a 4.7% increase in house prices over the course of 2024. Although their data doesn’t cover the whole of the market (it’s based on their mortgage-funded transactions) it does provide a good representative look at what’s been going on out there in the mortgaged property market. They say prices are still down from the peak in summer 2022 (graph below) but it shouldn’t be long before that is surpassed. In the North-West, they have seen house prices increase by 5% over the past 12 months - a really solid return.
UK house prices are approaching a return to their Summer 2022 peak.
As for 2025, Nationwide predict an increase in property transactions over the first quarter as homebuyers look to rush through completions ahead of the April stamp duty hike. Recent experience of stamp duty changes has shown a spike of activity approaching the deadline followed by 3-6 months of low activity so estate agents can expect a quiet summer!
Turning to the rental market, Zoopla has reported that UK rents have increased by 3.9% over the past year. This varied significantly by region with Northern Ireland seeing a whopping 10.5% increase compared to London’s fairly meagre 1.3% growth. The North-West saw a steady 6% rise in rents.
Anecdotally, and from my conversations with other local investors and agents, it seems like rental demand across the North-West has never been higher. Well priced rental stock is not sticking on the market with good properties seeing dozens of applicants within hours of being advertised. There’s no reason for this to change in 2025 with rental stock remaining below pre-pandemic levels (graph below) due to high numbers of landlords exiting the market.
Zoopla is predicting a further 4% increase in rents over the course of 2025 which seems a pretty safe bet, given the supply issues and upcoming legislation changes for landlords to comply with.
Supply of rental properties remains below pre-pandemic levels.
So what will 2025 bring for house prices?
Rightmove is predicting a 4% increase in house prices over the next 12 months; the same as Zoopla’s prediction for rents above. They point to likely decreases in mortgage rates as lenders come to terms with the Bank of England’s lower base rate and a more stable political landscape as being key factors. They reckon we will see mortgages drop from their current 5% average to somewhere closer to the 4% mark which will help to encourage homebuyers and investors alike.
“Did you know, Boxing Day is by far Rightmove’s busiest day of the year for website traffic?”
Elsewhere, a 4% increase is a popular prediction with the likes of Savills and Nationwide sharing Rightmove’s view.
Halifax are more cautious with a 0-3% increase predicted. However, it’s safe to say they’re one of the more pessimistic predictors out there, given they predicted a fall in house prices of up to 4% last year and up to 8% in 2023!
Rightmove saw a 26% increase in Boxing Day listings in 2024 which shows a strong market to kick off 2025. Apparently, mid-market 3/4-bedroom properties led the way.
Whichever prediction you prefer, it’s looking likely to be a positive 12 months for the property market!
That’s all for this edition. I’ll be back next month with some updates on my own projects. Have a great month in the meantime!
Thanks for reading,
John