As 2024 comes to an end, we’re looking ahead to what 2025 might hold for property prices. Drawing on seasonal trends, economic projections, and mortgage rate predictions, Rightmove's  experts have analysed the housing market to forecast the year ahead.

This forecast has been analysed using real-time data enabling Rightmove to monitor housing market changes as they occur, including reactions to significant events like the Chancellor’s Autumn Budget and the second Base Rate cut of the year on 7 November, which lowered interest rates to 4.75%.

Recent Market Shifts

In the weeks leading up to the Budget, some home-movers put their plans on hold, anticipating measures that might impact their decisions, especially first-time buyers. However, the lack of targeted support for home-movers in the Budget extended this hesitancy.

Since the Base Rate cut, however, we’ve observed a strong rebound in buyer interest. The number of people contacting Seths about homes for sale has risen by 23% compared to 2023’s quieter market. Additionally, the number of agreed sales is up by 26%, signalling renewed market activity.

Current House Price Trends

In November, the average house price fell to £366,592, a decrease of 1.4% from October. This follows a more subdued price increase last month than is typically seen in October. Sellers appear to be pricing their homes more competitively in an effort to secure buyers ahead of the usual seasonal slowdown leading up to Christmas.

Despite this monthly dip, house prices remain 1.2% higher than they were in November 2023. This slight annual growth, combined with strong recent buyer activity, points to an upward trend in house prices as we move into 2025.

Forecast for 2025

Rightmove’s property expert, Tim Bannister, offers a positive outlook:

“The signs are that the market momentum we’ve seen this year will carry forward into next year, especially if mortgage rates fall to levels that improve affordability for movers currently holding back. While we expect some challenges along the way, the pace of mortgage rate reductions will be critical for activity during traditionally busy periods.”

Mortgage rates are expected to decline steadily throughout 2025, though perhaps more gradually than previously anticipated. This reduction in rates is likely to improve affordability, enabling more people to make their move.

A 4% Rise in House Prices Predicted

With growing affordability and an increase in buyer activity, we anticipate house prices could rise by 4% over the course of 2025.

Tim adds:

“The overall picture of market activity is much more positive than it was at this time last year. This positions us for a stronger 2025 in terms of both house prices and the number of homes sold, particularly if mortgage rates fall enough to make homeownership accessible to a broader group of buyers.”

 

As we look ahead to 2025, the signs suggest an active and more dynamic housing market.