0:01 AM, 13th December 2024, About 2 weeks ago
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National average asking prices are expected to rise by 4%, with 2025 shaping up to be a bumper year for the housing market, according to Rightmove.
The property portal predicts that the number of homes for sale will hit record highs, with 1.15 million properties expected to be sold.
Rightmove also anticipates a rush from first-time buyers looking to beat the stamp duty changes due to come into effect in April.
According to Rightmove, national average asking prices are set to rise by 4% in 2024. Compared to five years ago, the average asking price for a home in London has increased by 12%, while for Great Britain as a whole, asking prices have risen by 21%.
In 2019, the price of a home in London was more than double (+101%) the average for Great Britain. However, this gap has since narrowed to 86%.
In 2019, and the subsequent Covid influenced years saw slower price growth for the London sales market. In 2019, average asking prices fell in London by 0.5%, compared to a 0.8% rise across the UK as a whole.
The property portal also says the average number of available homes per estate agent branch is at its highest for this time of year in ten years.
Rightmove says mortgage rates are likely to drop next year, but it’s still unclear by how much.
By the end of 2024, five-year and two-year fixed mortgage rates are expected to be around 4.0%. This would be a drop from the current rates of 4.83% for five-year fixes and 5.08% for two-year fixes.
Matt Smith, Rightmove’s mortgage expert said: “It is likely to be a mixed year for the market. Those who took out peak-mortgage rate two-year fixes after the mini-Budget will see their deal come to an end and will likely find themselves with lower costs next year. Combined with wage growth, they may feel some significant affordability improvements.
“By contrast, many movers will be rolling off a relatively low five-year fixed rate agreed during the busy market of 2020 and will see costs rise.”
The Budget confirmed that, from April next year, stamp duty thresholds in England will be lowered. For first-time buyers, the exemption threshold will drop from £425,000 to £300,000, while for standard residential properties, it will fall from £250,000 to £125,000.
For landlords, the stamp duty surcharge on additional homes was increased in the Budget from 3% to 5%.
Many first-time buyers are rushing to beat the stamp duty changes, with the number of active buyers sending enquiries to agents up by 13% compared to the same period last year.
According to Rightmove, just 8% of homes in London and 24% in the South-East will be stamp duty-free.
Rightmove’s property expert Tim Bannister predicts a bustling housing market in 2025:
He said: “We expect a busier year in 2025, with around 1.15 million transactions completed. Stamp duty charges rising from 1st April means we are likely to see a particularly busy first three months of the year as first-time buyers, home-movers and investors all try to complete on planned purchases and avoid higher charges.
“The effects of stamp duty rising will be felt for the rest of the year too, and we may see some negotiation tactics play out, particularly on properties close to the £300,000 mark, as both buyers and sellers try to mitigate their higher costs through the price agreed.”
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