National estate agent Jackson-Stops has forecast a potential 4% increase in UK house prices for 2025.
The firm said it expected house prices to stay similar to 2024, with more than a third of their agents predicting stable prices, and another third anticipating a 2% to 4% rise.
The start of 2025 could be busy as buyers act before current Stamp Duty incentives expire.
Agents described the 2025 market as ‘challenging’, ‘balanced’, and ‘competitive’.
The recent Budget changes, including increased Stamp Duty on second homes, could cause short-term market cooling.
Nick Leeming, chairman of Jackson-Stops, anticipated “a period of stability and soft growth.”
Leeming added: “We anticipate that this stability will encourage more people to enter the market, whether they are first-time buyers or those looking to move up the property ladder.”
Leeming noted that the prime market was likely to see significant activity due to increased buyer confidence and a stable economic outlook, which could benefit all stages of the property chain.
He also expected mortgage rates to stabilise or decrease, attracting investors to secure, high-return assets.
Jackson-Stops called for the Government to prioritise housing for older demographics to encourage downsizing and market fluidity.
Leeming said: “Overall, the outlook for 2025 is quietly optimistic with demand moving in the right direction following a cautious 2024.”
Upsizing families and downsizing retirees are expected to remain the main drivers of property sales next year, according to Jackson-Stops.
However, buy-to-let activity could slow due to the Stamp Duty changes.
Jackson-Stops reported that 92% of agents said sales were taking longer due to mortgage processing delays and regional differences in searches and legal processes.
Nick Ferrier from Jackson-Stops Midhurst said the impact of VAT on private school fees could affect mid to high-end market segments.
Alastair Hancock from Jackson-Stops Kent and East Sussex noted strong demand in areas with good schools, maintaining a stable market for properties up to £1m.
He said: “The early part of 2025 is expected to see a resurgence in both buyers and sellers entering the market.”
Chris Jarrett from Jackson-Stops Cheltenham said that despite economic uncertainties, the local market is resilient, with the area attracting upsizing families.
Marcus Browne from Jackson-Stops Taunton said Somerset’s market was set for a stable year with demand for move-in-ready homes.
He said: “Renewed buyer confidence coupled with a strong supply of desirable properties suggests a balanced and active market.”
Jackson-Stops found that 49% of prospective buyers prefer a ‘freshen-upper’ property to add personal touches, while only 22% want a turnkey home and 16% a fixer-upper.
This year, 47% of potential movers chose a ‘freshen-upper’ to personalise their new home, but only 10% felt skilled enough for major renovations.
Rents across Jackson-Stops’ network are expected to rise 2% to 3% in the coming year.
Will Jordan from Jackson-Stops Alderley Edge said: “2025 presents several opportunities for the lettings market.”
Changes like the Renters’ Rights Bill and new EPC requirements will challenge landlords, especially smaller ones, who may exit the market, offering buying opportunities for professional landlords.
Tenant protections are set to improve, but affordability remains a concern. Jordan added: “A more tenant-friendly environment” will benefit renters.
In London, Harry Buchanan from Jackson-Stops Pimlico and Westminster reported resilience in the market, with Q3 2024 seeing more cash purchases than the previous year.
Buyers are being encouraged to act before potential tax changes, while demand keeps rents strong, especially for properties with HMO licences.
In the new homes market, Sarah Walsh of Jackson-Stops expects a boost by mid-2025.
She said: “As confidence returns, we expect demand to become more apparent.”
