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House prices set to rise by 6.3% by end of 2025

A new forecast by peer-to-peer real estate investment platform, easyMoney, predicts a 6.3% growth in UK house prices by the end of 2025, reflecting recent optimism in the property market.

Market analysis and forecast
easyMoney’s analysis draws from historic sold prices in the Gov UK House Price Index and mortgage-approved house prices from the Nationwide House Price Index. This comprehensive study of recent trends forms the basis of their forecast, which anticipates significant price growth by the end of 2025.

Recent data indicates a period of decline in UK house prices, with the Gov UK House Price Index showing a drop from £285,862 in August 2023 to £280,673 in February 2024. This downward trend led to bleak predictions from industry experts such as Lloyds Bank, Rightmove, and Zoopla, who forecasted price drops between 1% and 4% by the end of 2024. In November 2023, Savills predicted a 3% fall by December 2024 but recently revised their forecast to a 2.5% increase.

Renewed optimism in the housing market
This shift in sentiment is partly due to recent Price Paid data from the Land Registry, which shows an uptick in March 2023 with average prices rising to £282,776 from February’s £280,673. Mortgage approval data from the Nationwide House Price Index further supports this trend, showing steady increases in house prices since early 2024, reaching £261,962 in April—the highest since June 2023.

easyMoney’s house price forecast
Based on these historic trends, easyMoney projects that the average house price will rise by 3.6% to £292,838 by this time next year. By December 2025, prices are expected to have increased by 6.3%, reaching an average of £300,559.

Jason Ferrando, CEO of easyMoney, comments: “The recent doom and gloom around the UK housing market has not been unjustified, but it could be argued that lots of industry voices have been far too quick to paint negative pictures while the economic outlook has been one of uncertainty.

“Time and time again, UK property has proven itself to be resilient in the face of external pressures, and while prices may dip for a while, they rarely ever crash and always bounce back quickly. This is what makes property such a sound and sensible investment and a significant step away from other, more volatile assets that are far more volatile in the face of perceived socio-economic pressures.”

A resilient investment
Despite previous forecasts of a downturn, the UK housing market shows signs of recovery and growth. The easyMoney forecast underscores the resilience of property as an investment, highlighting its stability in comparison to more volatile assets. As the market continues to improve, both homeowners and investors can look forward to a period of sustained growth, bolstered by renewed confidence in the property sector.