Promising Start to 2025 in the Housing Market, But Challenges Remain
The housing market has kicked off 2025 with a surge in activity, according to Rightmove's latest insights. January has seen the largest rise in seller asking prices at the start of a year since 2020, with an average increase of 1.7% (+£5,992), bringing the average property price to £366,189.
Sellers Flood the Market
A record number of sellers have entered the market since Boxing Day, offering buyers the widest choice of properties in a decade. The number of new listings is 11% higher than the same period last year. However, increased competition among sellers means pricing realistically is crucial. Over-optimistic pricing may leave some homes unsold as buyers gravitate toward better-priced alternatives.
Buyer Activity on the Rise
Buyers are also showing strong interest. Enquiries are up 9% compared to the same time last year, and sales agreed are 11% higher. Rightmove has recorded its busiest ever start to a year for Mortgage in Principle applications, a sign of intent from potential buyers eager to understand their borrowing capacity.
Uncertainties Ahead
Despite the positive indicators, challenges loom. Mortgage rates remain stubbornly high, with the average five-year fixed rate at 4.75%, only slightly lower than 4.78% a year ago. Additionally, the approaching stamp duty changes on 1st April could dampen demand, particularly among first-time buyers in pricier areas. Interest rate uncertainties also weigh heavily, with mixed signals about how many rate cuts to expect in 2025.
Expert Advice for Sellers
To stand out in this competitive market, sellers should heed their agents' advice on realistic pricing and focus on presenting their homes in the best possible light. Features like immaculate presentation and competitive pricing can make a significant difference in attracting buyers.
Outlook for 2025
While the market shows promise, sustaining momentum will require favourable developments, such as lower mortgage rates and support for first-time buyers. Economic stability and consistent policies from the Bank of England will also play a critical role.
For buyers and sellers alike, the housing market in 2025 offers opportunities, but a clear strategy and realistic expectations are key. At Town and City Homes, we’re here to guide you through these dynamic times with expert advice and local market insights.
