Looking ahead: What the property market may have in store for us in 2025

We’re kicking off 2025 with a confession; we hadn’t actually intended to put any predictions out there for this year, even as a little bit of fun. While a bit of idle speculation on the property market is enjoyable (and inevitable when embarking on a new year) it’s still difficult to get these predictions right, or original for that matter, when the property market exists in a state of such constant flux. However, we decided to get our teeth stuck into the subject all the same, as we all know it’s just as fun to compare what you got right and wrong the following year, just like we did in our 2024 retrospective blog. So let’s dive in!

Prepare for a spring surge

A perfect storm of market conditions, timing, and external influences are shaping up to create the ideal scenario for a bumper Spring, potentially being busier for the UK property market than it has been in years.

At the forefront of this is when the stamp duty tax thresholds reduce to £300,000, rather than £425,000 for first time buyers, and £125,000 from £250,000 for everyone else respectively, when the clock strikes midnight on March 31st. That’s a lot more to cobble together for cash buyers if their purchases are to complete after this critical cut-off deadline. Considering that the average price of a home in the UK in 2024 was £292,000, it seems many can expect to pay stamp duty for the first time the next time they move.

The general expectation is that we’ll see an increase in market activity, as so many transactions push ahead to complete ahead of the deadline. We saw the same thing during Covid as buyers and sellers followed the herd and made very quick short-term decisions when faced with a stamp duty change deadline. The data from 2021 clearly shows a significant increase in transactions each time the deadline loomed.

There is however, a different possible outcome entirely. Given that it takes on average 185 days to complete on a property, and the deadline is less than 90 days away, we could well see some sales fall-through as people decide to save up to cover the stamp duty costs at a later date. One to look out for!

Compliance without compromise

Adhering to rule changes and guidance updates was already a big topic of conversation in 2024, do you remember Material Information? Given that updated guidance on Material Information by the National Trading Standards’ Estate and Letting Agency Team was issued towards the end of 2023, much of 2024 has seen agents adapting how they work to adhere to the changes. And there’s more coming over the compliance horizon, this time for Anti-Money Laundering (AML).

On May 14th 2025, new AML regulation changes will be introduced for letting agents, significantly expanding compliance obligations. For landlords, AML checks previously only had to be initiated where the monthly rent threshold surpassed £10,000 (high end lets). However, that threshold has been removed meaning that all letting agency work will now be required to comply with regulations – many of which will never have involved carrying out AML checks before.

Up until this point the £10,000 threshold acted as a natural barrier, so it will now be more important than ever for agents to get up to speed with the requirements, and make sure they are prepared to start carrying out compliance checks. And they’re going to have to take on this additional workload without compromising on service, a balancing act that will likely be difficult to get right.

The most cost-effective and accurate way for estate agents to meet all these compliance challenges is to adopt a digital approach to compliance. Or failing that, seek out a trusted partner who can take the burden of compliance checks.

Remortgaging? Don’t get too comfortable with lowering interest rates

It would be remiss of us to not even make a passing mention of interest rates and mortgages considering how central they were to the conversation in 2024. Following on from the Bank of England reducing the base rate once again to 4.75% in November, borrowing has been becoming somewhat more affordable again.

That being said, rates are still much higher than they were just a few years ago, and while we’re unlikely to return to a world where 1-2% rates were the norm, the base rate is projected (and widely expected) to fall closer to 4% by the end of 2025.

So what does all this mean for mortgage holders? Recent data from the Bank of England states that millions of mortgage holder’s terms are coming to an end in the next few years. So many of those homeowners who either smartly, or fortuitously, took out mortgages when rates were very low, thus avoiding that perilous peak, will unfortunately face remortgaging with higher rates this time around.

And so it remains that, while rates are coming down, the costs of mortgages are still going to be higher for many borrowers, an all too familiar tale.

We’re watching you, 2025…

Well there you have it, a couple of predictions from our crystal ball for the property market and, as always, there’s plenty to put on your radar to set you up in the best way possible for the year ahead. In the meantime, we wish you all the best in 2025 and keep an eye out for our predictions retrospective blog when it comes out towards the end of the year.

What are your predictions for 2025?