The housing market is showing signs of renewed activity as buyers respond to the recent cuts in the Bank of England’s base rate. While average property prices fell by 1.4% this month to £366,592—greater than the usual seasonal dip—market optimism remains strong for 2025. Rightmove is forecasting a 4% increase in asking prices next year, driven by falling mortgage rates and pent-up demand.
Asking prices dip, but market remains strong
This month’s price drop, larger than the typical 0.8% seasonal decline, reflects both pre- and post-Budget uncertainty. The Budget’s announcement of stamp duty increases has created challenges for buyers and sellers alike, yet market fundamentals remain stronger than last year.
Tim Bannister, Rightmove’s Director of Property Science, explained: “We had been seeing a drop-off in buyer demand in the lead-up to the Budget and its immediate aftermath. However, a second Bank Rate cut and optimism for 2025 appear to have reversed this trend.”
Rightmove’s data reveals that the number of agreed sales is currently 26% higher than this time in 2023, while the number of new sellers listing properties is up by 6% year-on-year. Bannister anticipates a stronger 2025, stating: “This sets us up for what we predict will be a stronger year in both prices and the number of homes sold, particularly if mortgage rates fall enough to improve affordability for more buyers.”
Competition among sellers reaches decade-high
Despite growing buyer interest, sellers face intense competition, with the number of homes for sale per estate agent at its highest level for this time of year since 2014. Bannister warned: “Sellers will need to price temptingly to secure a buyer while choice remains high, and buyers are still affordability-stretched.”
Affordability concerns linger, with further cuts to the Bank Rate now expected to be slower than previously forecast. Nathan Emerson, CEO of Propertymark, noted that the current market offers unique opportunities for both buyers and sellers: “Many buyers in England and Northern Ireland are looking to move quickly before the stamp duty rises in April. This could result in heavier negotiations and even a small dip in average house prices before demand accelerates again.”
Kevin Shaw, National Sales Managing Director at Leaders Romans Group, highlighted the seasonal impact: “Decisions are being made now before the Christmas slowdown. Buyers are more likely to secure price flexibility from sellers now than in the New Year, when interest traditionally picks up.”
Looking ahead: optimism for 2025
Experts remain cautiously optimistic about 2025, with many predicting a rebound in market sentiment as mortgage rates decline. Bannister forecasts that next year’s market will benefit from increased affordability, driving a 4% rise in asking prices, the largest predicted increase since 2021.
Alastair Cochrane, Group Sales & Operations Director at Stirling Ackroyd, suggested sellers take advantage of the current environment: “Now is a good time to list. Committed buyers are still active, and for sellers targeting first-time buyers, the window to benefit from stamp duty relief is closing. Investors, too, should consider recalibrating their offer prices to account for higher stamp duty, as rising rents are offsetting these additional costs.”
The market is also likely to see a boost in completed sales ahead of the March 2025 stamp duty deadline, with a surge of activity expected in early spring. However, experts caution that the speed of mortgage rate cuts will be a key factor in sustaining momentum throughout next year.
As the property market prepares for 2025, questions remain about how effectively it can balance rising demand, affordability concerns, and legislative changes like the increased stamp duty. For now, buyers and sellers have a unique opportunity to capitalise on the current market dynamics before further shifts take hold.
