Should I buy or rent in 2025?

Choosing to buy a house is one of the biggest decisions you are likely to make in your lifetime. There are many factors that influence a house purchase, these include: finances, housing market conditions, and mortgage rates.

Is 2025 a good time to buy?

No-one can be sure which direction the housing market will go in. However, there are trends that are worth considering. House prices are expected to increase in 2025 at an estimated range from 2.5% to 4%. The changes in stamp duty from April 2025 are something to factor into your costs.

Mortgage rates

The mortgage rate you are offered is a huge factor in working out your costs in purchasing a home, so calculating this will help you figure out whether it’s affordable for you. Predictions for mortgage rates are that they are likely to stay at their current levels for a period and then reduce very gradually over the next couple of years. This depends on factors including world events, swap rates, and inflation. 

Rental costs

Despite rental growth slowing, rent costs are unlikely to decrease in 2025. With the Renters’ Right Bill becoming law this year, landlords could decide to increase rent to cover their additional costs. It’s worth noting that landlords are only allowed to increase the rent once a year, and the bill should allow tenants to challenge any unreasonable increases.

Mortgage vs Rent

Although mortgage rates are higher than they have been in the last 10 years, they are still relatively low. It is worth comparing mortgage payments to rental costs. Having a mortgage and making monthly payments reduces your loan amount and also builds up your property equity. Fixing your rate for say two or five years can provide comfort in that you will pay a specific amount for that duration, without any increases, unlike rent which could increase 5-10% annually.

Everyone’s situation is different, you need to work out whether buying a home is manageable for you. Below are some tips to help you decide whether you are ready to step onto the property ladder:

  • Deposit: the more you can save for a deposit, the lower the interest rate you will be offered. 100% mortgages are available to some tenants
  • Budget: calculate how much calculate how much you can afford – not just the price of the house, but monthly payments and all other costs. You want to feel comfortable, and not not be struggling to make ends meet!
  • Spending: when you apply for a mortgage, you will be required to share 3-6 months of bank statements to see if you can afford the mortgage repayments. Because of this, it's good to be mindful of your spending in the months leading up to application.
  • Credit score: having a good credit score can help your chances of being accepted for a mortgage. For advice on improving your credit score click here.
  • Speak to a broker: there are so many options available, including schemes to help you buy your home. Speaking with an independent mortgage broker who can help you find the right option for you, and help you through the process.

Recent posts

Equity release is a type of mortgage that allows homeowners 55 and over to access money from their property's equity without having to leave their home. This is done by securing a loan against the house which is usually repaid by selling the property when the borrower passes away or has to move into long-term care.

It’s important to ask questions about the property you are interested in before taking that step to make an offer. A little probing can make all the difference between buying your dream house or something that requires a lot of work.

There are millions of homeowners over the age of 60 who are likely to release money from their homes to pay for their lifestyle during retirement giving those who are 'asset rich but cash poor' a way to live out their retirement the way they wish. 

The average age of a first-time buyer in the UK is two years older than 10 years ago. This is understandable with managing the cost-of-living and challenges within the economy such as high interest rates making it difficult to get onto the property ladder.

Skipton Building Society launches ‘Delayed Start’ mortgage meaning first time buyers won’t be required to make repayments for the first three months. 

According to a survey by Skipton, first time buyers who bought their home in the last five years found that in the first three months of living there, they were spending upwards of £30,000.

If you have recently moved into a property with a garden that requires a little TLC, or you’d like to get on top of your current green space, check out our tips.

High street lender, NatWest, have launched a new product to help first-time buyers purchase a property with assistance from a family member or friend to get them on the property ladder sooner.

‘Buy Now, Pay Later’ (BNPL) schemes, such as ‘Klarna’ are short-term loans that allow shoppers to make a purchase, but delay paying for it for an agreed amount of time.

Klarna is one of the most popular BNPL services with 18 million customers in the UK alone, and offers interest-free payment options which is appealing to shoppers. However, does it affect a mortgage application?