Local Property Market Predictions for 2025
By Julian Reid – Owner Julian Reid Estate Agents
What will the new stamp duty deadline mean? Will interest rates fall? Will landlords continue to sell?
What are the predictions for the 2025 property market?
Stoke Newington Property Market Predictions
The final few months of 2024 were unseasonably busy in Stoke Newington, providing a good foundation for the start to 2025. Consequently, the local North London market has started surprisingly well with higher than normal levels of new properties coming to the market and buyers out in force.
This local trend is mirrored nationally, with the recent stats from Rightmove’s House Price Index stating that the average price of property coming to market has risen by 1.7%, the largest jump in prices at the start of the year since 2020.
With a record number of early-bird sellers coming to market since Boxing Day, giving buyers the highest level of choice at the start of a year since 2015, and 11% ahead of the same start-of-the-year period last year.
The number of buyers contacting agents about properties for sale since Boxing Day is 9% ahead of last year, and the number of sales being agreed over the same period is up by 11%.
Overall, it’s shaping up to be a strong start to the year!
Prediction – Our prediction for the local Stoke Newington housing market for 2025 is airing on the side of caution with an increase of 4% – 5%.
The Rental Market
Prospective landlords are facing challenges due to rising mortgage rates and higher stamp duty costs. Zoopla has reported that many landlords are choosing to sell their properties, particularly in higher-value areas of London. In the WC postcodes, 32% of homes for sale have been rented out within the past four years, significantly higher than the national average of 12%.
This trend of landlords selling, especially in more affluent London areas, is expected to continue into 2025.
The upcoming Renters’ Rights Bill, expected to become law this year, will introduce key changes, such as a ban on “no-fault” evictions and new requirements for landlords to improve the energy efficiency of rental properties. However, the National Residential Landlords Association predicts that stricter tax regulations could reduce rental supply as more landlords exit the market.
On a more positive note, Rightmove reported in December that the average rental property is receiving 11 inquiries, up from just 6 in 2019. Additionally, rental prices for newly let properties in the UK saw a year-on-year increase of 2.6% as of November, marking the lowest annual growth since November 2020 (2.4%).
Prediction – The prediction for the 2025 rental market, is that rental price growth is forecast to reach 3.7% across the UK, with a more modest 1.5% increase in London, where tenants have already experienced substantial rent increases.
Mortgage Interest Rates
Mortgages are expected to play a key role in supporting the property market in 2025. In 2024, we saw a gradual decline in interest rates, with two-year fixed rates falling from 5.93% to 5.48%, and five-year rates from 5.55% to 5.25%.
Following the October 30 budget, the pace of interest rate reductions slowed as concerns over potential inflation prompted the Bank of England (BoE) to keep its base rate at 4.75% in December. However, with inflation now easing, there is renewed optimism around a potential rate cut, with the BoE’s Monetary Policy Committee set to make a final decision on February 6.
Economists are increasingly confident that rate cuts are on the horizon. A recent survey of 51 economists by The Times predicts at least four rate cuts in 2025, an upgrade from earlier expectations of just two. Such a move could provide a significant boost to the property market, particularly in the southeast, where housing prices tend to be higher.
Prediction – The mortgage interest rate prediction for 2025, is that new rates will average just above 4 per cent by the end of 2025 (with a 25 deposit).
Stamp Duty
From 1st April stamp duty tax will start at a purchase price of £300,000, rather than the current £425,000, for first-time buyers. For those who are not first-time buyers, the threshold will go down to £125,000 from £250,000. Data from the property portal Rightmove suggests that from April 1 only 8 per cent of homes in London will not incur stamp duty for first-time buyers, while 24 per cent of homes in the southeast would be stamp duty-free.
In all probability, unless buyers have already agreed to buy a home and have made significant progress along the often tricky path to completion, there’s little chance of making the 31st March deadline, as the time this process takes is generally 4-6 months if not longer, and there is sure to be a very big bottleneck as we approach the deadline.
Robert Gardner, the chief economist at Nationwide, said the spring deadline this year was “likely to generate volatility, as buyers bring forward their purchases to avoid the additional tax”. However, buyers may discover that a stamp duty holiday is a con. These periods of tax discounts almost always drive property prices up so that, in the past, many bargain-hunters have ended up paying more for properties than any relative saving made on stamp duty.
Ray Boulger from the mortgage broker John Charcol said on a typical £500,000 property, the extra stamp duty would make up only 0.5 per cent of the purchase price and so even a small decline in prices after April 1 would make rushing to beat the March 31 deadline a false economy.
First Time Buyers
In 2025, one of the government’s key goals is to unlock more building land for first-time buyers, who now make up 49% of all homebuyers nationally—one of the highest proportions ever recorded. In areas like Manchester (75%) and Slough (73%), first-time buyers account for an even larger share.
First-time buyers taking advantage of landlord sales will be a major story in 2025. A recent report revealed that in 2024, the proportion of properties sold by landlords to first-time buyers reached its highest level at 35%, up from just 16% in 2016.
First-time buyers are also benefiting from an extraordinary wealth transfer from their parents, a trend that is set to continue into 2025. In 2024, gifts and loans from the Bank of Mum and Dad reached a total of £9.3 billion, providing a significant boost to new buyers entering the market.
Prediction – The prediction for 2025 is that The Bank of Mum and Dad will hand a record £10bn to their kids this year.
A selection of Recently Listed Homes From Julian Reid
Here are just a few of our most recently listed properties for sale from our Stoke Newington office –
Flat for Sale in London – Guide Price £795,000
Flat for Sale in London – Guide Price £740,000
Apartment for Sale in London – Guide Price £625,000
Flat for Sale in London – Guide Price £530,000
To see the very latest homes coming to the market, click ‘New to market homes’, this lists all of the very latest homes as they come to the market.
See our ‘Recently Sold Properties’.
Ready for a move in 2025?
Please feel free to call me at our Stoke Newington Office if you are considering selling your home in the N16 or surrounding areas of North London, either for an informal chat about the market and how we might help you with this or to book a market appraisal.
You can also use our Instant Online Valuation tool.
Good luck with your house hunting.
Julian Reid
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