Our 2025 predictions - plenty of buying potential...
Click on this text to edit it.
Stamp duty thresholds for first time buyers and home movers as of 2025…
The increase in wages and the curb on rising inflation will provide buyers with more money in their pocket (albeit a small amount) that they can save towards the deposit on their first home. If they have been saving this into a lifetime ISA this is more money that will benefit from the 25% government bonus which will further supercharge their savings. Coming through the end of the cost-of-living crisis potential buyers now have more money readily available to spend on a larger purchase such as a house. Having more surplus money each month will also allow buyers to spend more on a mortgage or stretch themselves to a larger purchase, one that may have felt out of reach when interest rates were higher in previous years or money was tighter.
When you factor in the biggest and most promising prediction of 2025, that the Bank of England base rate will drop to 3.75% by Christmas 2025… makes this upcoming year a promising year for personal purchases. The base rate currently sits at 4.75%, with a further 2 cuts expected, one in Quarter 1 and further cuts in Quarter 2 & 3. We expect each cut to be between 0.25 – 0.5% at a time as the Bank of England aim to lower the base rate to the long-term average of 4%.
With interest rates stabilising after Liz Truss shock budget in 2022 and the economy almost collapsing overnight which sent interest rates sky rocketing, the base rate has steadily been falling year on year which gives buyers confidence that the volatile times in the market are a thing of the past. This should bring out the buyers that have been sat on the fence waiting for better times to buy a property.
With more buyers who will take advantage of better interest rates and more surplus income each month entering the market, demand will increase within the market which will drive up property prices. We expect property prices to continue to rise at a rate of 3-4% in 2025. Many lenders and economics predict that the number of transactions in 2025 will increase from 1.05m in 2024 to 1.2m+.
Share this post: