UK housing market experiences significant growth at start of 2025

The UK housing market has witnessed its strongest start in three years, with new sales agreements up 12 per cent in the four weeks to 24 January, compared to the same period last year, as reported by property website Zoopla.

This surge in activity coincides with a 10 per cent year-on-year increase in the number of homes available for sale.

Zoopla attributes this uptick to buyers aiming to finalise purchases before the upcoming stamp duty changes on 1 April. These changes will reduce the "nil rate" band for first-time buyers from £425,000 to £300,000 in England and Northern Ireland.

The current average UK house price stands at £267,700, reflecting a rise of £5,200 over the past year, following a previous dip of £2,400 in 2023.

This early-year boost suggests a potential resurgence in market activity, although the effects of the forthcoming stamp duty changes remain uncertain.

Increased sales volumes are fuelling house price inflation in the UK. Zoopla noted that house prices were, on average, 2 per cent higher in December 2024 than a year prior, with increases ranging from 7.7 per cent in Northern Ireland to 1 per cent in eastern England.

However, signs indicate that the recent uptrend in prices may be stabilising as mortgage rates rise and buyers enjoy a broader selection of available properties.

Zoopla stated that house price inflation will likely be moderated throughout 2025, while the ongoing North/South divide in home price inflation is expected to persist over the coming year.

Richard Donnell, executive director at Zoopla, remarked: "The first few weeks of each year tend to provide a clear indication of how the rest of the year is likely to unfold. 2025 has started well, better than 2024 and 2023, which bodes well for market activity over the rest of the year, supported by evidence of more people looking to move."

He added, "It is important not to read too much into the impending increase in stamp duty for more buyers from April, as three in five first-time buyers will still pay nothing from that date. The added costs for homeowners are manageable and unlikely to curb sales, although they will help to temper price increases."

Donnell further mentioned, "The healthy stock of homes on the market will help maintain control over price rises, with a forecast indicating average UK house prices will increase by 2.5 per cent in 2025, alongside a 5 per cent rise in sales compared to last year at 1.15 million."

He concluded by stating that rising incomes and base rate cuts would enhance affordability and bolster consumer sentiment.

Malcolm Prescott, managing director of Webbers Estate Agents, noted: "January has started very positively here in the South West, with an abundance of new listings and sales to match."

Zoopla's figures also reveal the average house price changes across UK nations and regions in December 2024, detailing both cash increases and percentage terms.