The new year begins with snow, sleet and ice, across the country and in parts of Leeds. In our new year blog post, though we are looking at the climate of property predictions from experts, as no one has a crystal ball.

In 2025, the UK property market is expected to experience modest growth, influenced by factors such as mortgage rates, regional disparities, and policy changes.

House Price Growth

National Outlook: the Halifax anticipates house price growth between 0% and 3% in 2025, while Nationwide forecasts an increase of 2% to 4%.

Regional Variations: Savills projects stronger growth in regions like the North West, North East, Scotland, and Yorkshire and the Humber, with expected increases of around 5%. In contrast, areas such as the South West and East of England may see more modest rises of approximately 2.5%.

Leeds Variations: Leeds has wide disparities across different postcodes and suburbs.  We do expect more substantial price increases in areas where property prices are lower (Harehills, Beeston, Holbeck, for example) and slower growth in places like Horsforth, Alwoodley, Headingley, the city centre and Roundhay.

Mortgage Rates

Average mortgage rates are predicted to decline, with five-year and two-year fixed rates potentially dropping to around 4.0% in 2025, down from current averages of 4.83% and 5.08%, respectively. This anticipated reduction is linked to expected cuts in the Bank of England Base Rate. It was only 3 years ago that fixed term mortgages were under 2% but they have risen since but are on a downward trajectory, it seems.

Policy Changes

The scheduled end of stamp duty relief for first-time buyers in April 2025 may lead to increased market activity as buyers rush to complete purchases before the deadline, potentially exerting upward pressure on house prices.

Rental Market

Rental growth is expected to moderate, with average rent increases projected to fall to 4% or lower in 2025, following significant rises in previous years.

Considerations for both Buyers and Investors:

Affordability: While declining mortgage rates may improve affordability, regional disparities in house price growth could influence purchasing decisions.

Market Timing: Prospective buyers might consider acting before the end of stamp duty relief in April to benefit from potential savings.

Regional Opportunities: Investors may find more significant growth potential in northern regions and Scotland, as these areas are projected to outperform the national average in terms of house price appreciation.

Overall, the UK property market in 2025 is poised for modest growth, with regional variations and policy changes playing pivotal roles in shaping market dynamics.

Our View:

What we’ve found from our base in Harehills is that property and rentals are being snapped up quickly by tenants, buyers and investors. We’ve witnessed properties go under offer on release on the property portals, our social feeds and website.

If you’re looking to sell or let quickly, do email our team at enquiries@hogans.co

We have an enviable track record in marketing, letting and selling homes quickly – and with speed of the sales process being important, it is important that you choose an agent like Hogan’s who excelledin 2024 and will in 2025.