With the end of the year drawing closer, housing experts have revealed their forecasts for 2025 and beyond – and the news is positive.
According to national property firms Hamptons, Savills and JLL, the future looks bright.
There’s no talk of a boom but rather cautious optimism for a steady-as-she-goes uptick.
But first, a quick report card on 2024
The market has outperformed expectations.
Hamptons predicts that by the end of the year, 1.1 million properties will have changed hands (well up on the 996,000 transactions in 2023).
And, by the end of December, house prices will be up 3.5% from the previous year.
First-time buyers have been particularly active, accounting for almost a third of all sales.
Looking ahead
Many believe the Bank of England base rate (currently 4.75%) could drop to 3.75% within 12 months.
Lower interest rates and stable inflation (the Bank appears to have it under control now) should spell good news for the property sector.
Hamptons, factoring in the impact of stamp duty rises, predicts property values to grow by 3% next year.
Relief for some mortgage holders
A turning point could be on the horizon for one particular group of homeowners – those who had to renew their mortgage or buy in the months after the infamous mini-budget.
Millions had to lock into two-year deals at well over 5%. As these deals expire, they’ll find more reasonable offerings are available – some below 4%.
The long-term perspective
As most homeowners view their property as a long-term investment, let’s look further into the future.
Savills (which predicts 3.5% growth in 2025) forecasts property price rises of 21.6% over the next five years. Meanwhile, JLL expects a 20% rise by 2029.
These forecasts are based on three assumptions: rates will fall (albeit not to 2020 levels), inflation will remain stable, and the housing supply shortage will continue.
Of course, none of us has a crystal ball and can know exactly what will happen at home or abroad in the years to come. However, owning a property remains a solid and sound investment for those who buy wisely.
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