The UK housing market is gearing up for a significant boost in 2025, according to a new forecast by property giant Rightmove. The company predicts a 4% rise in average asking prices, buoyed by anticipated interest rate cuts from the Bank of England and increased buyer demand.
What’s Driving the Predicted Price Surge?
Rightmove’s optimistic outlook stems from two key factors:
BoE Rate Cuts
The Bank of England has already begun reducing its base interest rate, which currently stands at 4.75%. Analysts expect further cuts in 2025, potentially lowering the rate to around 4% by the autumn. Lower interest rates typically translate to more affordable mortgage options, enticing prospective buyers into the market and driving up demand.Pent Up Buyer Activity
Buyer inquiries surged by 19% in the latter half of 2024, a trend expected to continue into 2025. Many of these buyers are keen to capitalise on favourable borrowing conditions and avoid potential stamp duty increases scheduled for April 2025.
Regional Variations: London Poised for Growth
While all regions are expected to benefit, London is predicted to see some of the most significant gains. After years of lagging behind the national market, the capital is set for a rebound. This resurgence is driven by increased demand for city living as major employers continue to mandate office based work.
Other hotspots include commuter towns and regions with strong transport links, which are likely to attract buyers seeking a balance between affordability and accessibility.
What Does This Mean for Buyers and Sellers?
For buyers, the anticipated rate cuts offer a chance to secure more competitive mortgage deals. However, with prices expected to rise, acting sooner rather than later could be wise. Keep in mind that increased competition may lead to bidding wars in popular areas.
For sellers, 2025 could be the perfect opportunity to maximise returns. That said, pricing your property correctly will be crucial to attracting serious buyers, especially in a market where supply levels remain high.
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