The British property market is poised to transition into a buyer’s paradise throughout 2025, with market analysts predicting enhanced negotiating power for house hunters amid a climate of “cautious optimism”.
Industry experts are tempering their positive outlook with consideration of impending challenges, including the scheduled termination of a crucial stamp duty relief for first-time buyers in spring, alongside persistent concerns about elevated interest rates and tax implications.
Hamptons’ head of research, Aneisha Beveridge, highlights a notable shift in market sentiment, attributing the change primarily to unexpectedly rapid decreases in mortgage rates. The property specialist forecasts a 3% rise in British house prices during 2025, followed by increases of 3.5% and 2.5% in subsequent years as affordability conditions improve.
London’s property market is expected to outshine other regions for the first time since 2015, with Hamptons projecting 4% price growth in the capital by late 2025. This renaissance is partly driven by major corporations mandating office returns, according to Rightmove’s property expert Tim Bannister.
The market’s transformation is already evident, with Rightmove reporting unprecedented Boxing Day activity from new sellers and a 20% year-on-year increase in buyer enquiries. First-time buyers continue to play a pivotal role, representing a record 31% of all transactions.
Despite potential market distortions ahead of April’s stamp duty changes, experts suggest the overall impact will be modest. The market’s trajectory will predominantly hinge on affordability factors, with income growth expected to surpass inflation for the second consecutive year, potentially motivating previously hesitant movers to take action.
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