Want a better deal on your mortgage?

Receive exclusive mortgage rates straight to your inbox

Call us: 0345 305 2540
Need help? 0345 305 2540
Remortgage Calculator Calculator

The Housing Market in 2025: Key Things You Need to Know

MORTGAGES | 10.02.2025

As a specialist mortgage broker, we can look at market growth, inflation, and other economic factors to make predictions on where we think the housing market will go in 2025

The beginning of the year is a time when we all wish we had a crystal ball to see where the year will take us, especially for homeowners and those looking to buy. If only we could predict exactly what was going to happen to interest rates, mortgage rates, and house prices. As a specialist mortgage broker, we can look at market growth, inflation, and other economic factors to make predictions on where we think the housing market will go in 2025. Although not an exact science in a volatile economy, we think there are some important and positive points that should be considered this year.  

What’s Happened to the UK Housing Market Over the Past Few Years?

The housing market in 2024 was somewhat of a rollercoaster. It was a strong year for sales as buyers and sellers returned in larger numbers, having previously delayed moving decisions in the face of higher mortgage rates. There were more homes for sale, and mortgage rates saw a steady decline, which drove growth in new sales in 2024. House prices increased but buyers became more sensitive to price in the latter part of the year amid the growing uncertainty of mortgage rates with the Autumn budget. However, these affordability pressures kept inflation in check. The bank's base rate of interest fell to 5% in August 2024 and in November, took another cut and fell to 4.75%. This rate was then held in December due to zero growth in the economy, which means that until the next Bank of England meeting in February, we can only predict what will happen within the housing market.  

Key Points You Need to Know About the Housing Market in 2025.

If you’re looking to move home this year, buy your first home, or remortgage, then understanding the below key points and predictions from an expert mortgage broker could help you on your way. Changes to Stamp Duty Rates. This is important for those moving in the first part of the year. From the 1st of April, stamp duty rates will rise, which could mean higher costs for those buying after the first three months of the year. Many buyers are rushing sales through before the deadline to avoid the higher costs, and the number of first-time buyers active in the housing market at present is 13% higher than the same period last year. A Fall in Mortgage rates. Mortgage rates could drop in 2025 to around 4.0% for five and two-year fixed rates, with both options starting to align closely, meaning that a two-year fixed rate will possibly become the more popular option. However, these figures will always be influenced by geopolitical and economic factors, and inflation could always rise again, but we should start to see an increase in buyer confidence and affordability with a steady decrease in mortgage rates. Lenders Focusing on Remortgagers. Many homeowners due to renew this year will have fixed their five-year deals before the pandemic or their two-year fixed deal after the mini-budget, meaning they could see big changes to their monthly repayments. For five-year fixed-rate mortgages ending this year, you will likely see higher costs than those you locked in pre-pandemic and for those renewing from a two-year fixed, chances are your costs will be lower than the high rates of 2022 or 2023. Entering Another Buyer’s Market. Much like last year, 2025 is set to be a buyer’s market whereby there will be an improved choice of homes for sale and longer average times to sell, giving buyers the upper hand when agreeing on a sale. House prices are set to rise by 4%, and it is expected that around 1.15 million buyers will complete this year. Major Growth in the Capital. Unlike the rest of the UK, London has seen very slow price growth for homes over the past five years, at just 12% compared to 21% nationally. That is set to change in 2025, with a renewed interest from international buyers driving up demand to live and work in the capital.    

What This Means if You’re a Homeowner or Looking to Buy in 2025.

These five key points mean that costs for purchasing a home in 2025 will increase due to the change in stamp duty, but mortgage rates are due to fall, so the extra money you spend on completing your house could be saved through your monthly payments. There will hopefully be much more choice this year for those looking to buy, and London is set to become a hotspot for buyers nationally and internationally. Remortgaging this year could make a significant impact on your passive income so it’s important to speak to a specialist mortgage broker who understands the housing market, like our team of expert mortgage brokers here at Taylormade.  

Taylormade: Independent Mortgage Broker Operating Throughout the UK.

If you’re feeling overwhelmed by what lies ahead for your house purchase or remortgage this year, you’re not alone. With the help of an expert, independent mortgage broker like Taylormade, you can rest assured we will find the best rates on the market, tailored to your unique preferences. Contact our team of specialist mortgage brokers today, we operate throughout the UK and are always ready to help.
Talk to us

If you're unsure and need some advice just give us a call, our expert team of advisers are available to help you choose the mortgage that is right for you.

0345 305 2540 info@taylormade-finance.co.uk

By clicking on the above link you will be leaving the regulated site of TaylorMade Finance Ltd. TaylorMade Finance Ltd is not responsible for the accuracy of the information contained within the linked site.

TaylorMade Finance Ltd is authorised and regulated by the Financial Conduct Authority (FCA Registration Number 669968). Company Registration Number 06742859

Complaints:

In the event that you wish to complain, you can contact us by email, telephone or letter.

Our address for this is:
Complaints Officer, TaylorMade Finance Ltd, 4 Church Road, Urmston, Manchester, M41 9BU. Our email address is info@taylormade-finance.co.uk and our telephone number is 0161 776 1089. We will then investigate the issues raised and inform you of our findings. Should you be unhappy with the resolution to your complaint you may contact the Financial Ombudsman Service, who can be contacted at the following address: Financial Ombudsman Service, Exchange Tower, London, E14 9SR.

Email: complaint.info@financial-ombudsman.org.uk
Phone: 0800 0234 567
https://www.financial-ombudsman.org.uk/

Your mortgage will be secured against your property.

Your home may be repossessed if you do not keep up repayments on your mortgage.

Our fee for this service is 1.95% of the mortgage balance (minimum £1,295 to a maximum of £2,995 although reduced to maximum £1,995 without debt consolidation). Typically this will be £1,995.