Expectations for mortgage rates and house prices in 2025

The general feeling is that UK homebuyers and homeowners are hoping for stability in 2025, which is understandable following a year of fluctuating mortgage rates. In 2024 two-year fixed rates were between 4.34% in January to 4.92% in July ending the year at 4.21%.* 

What will happen in 2025?

We are hoping that mortgage rates will ease this year, but how drastically depends on inflation trends, swap rates, and the Bank of England’s decisions in which way the base rate should go.

There are of course still challenges, especially for first time buyers who face affordability barriers, with an increase in rent and cost of living making it harder to save for a deposit. The upcoming changes to the stamp duty land tax means from April 2025 first time buyers will no longer be exempt on properties up to £425,000, as this is being dropped to £300,000 potentially adding thousands to the cost.

Housing

There is an expectation that house prices will be up and down in the year ahead with a possibility of an increase in homebuyers early on in the year as people try to complete deals before the stamp duty changes. Zoopla forecasts a 2.5% rise in property values.

What should I do?

At Mortgage Required, we still recommend getting onto the property ladder if it is affordable for you. It is important to remain proactive and secure a rate as soon as possible to protect you from the volatility of the market and review this rate regularly to take advantage of any reduction or changes in the perception of the market.

If you are a first time buyer or a homeowner nearing the end of your fixed term, we strongly encourage you to reach out to a whole of market broker who can help you find a competitive rate. Get in touch with the team today: 01628 507477.

*Rates shown are the best available rates at the time.

Recent posts

The UK government is introducing new rules for Energy Performance Certificates (EPCs) that will impact landlords. Here's a summary of the key changes

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.

Since being launched back in 1999 Individual Saving Accounts (ISAs) have been very popular for those wanting to put money into savings. There are four types of ISA, and the majority allow flexible saving and the ability to withdraw funds easily. There are financial penalties on certain products, these usually pay the most interest.

According to the Office for National Statistics, last year (ending March 2024), there were 153,800 new homes completed in the UK. To help the housing crisis, the UK government has pledged to build 1.5 million new homes in the next five years.

Check out some of the reasons why a new-build home might be for you.

Many households are still being affected by the high cost of living, with several people worrying about how they can make ends meet on a monthly-basis. Unfortunately, the cost of bills including, water, council tax, and energy are still rising. Here are some things you can do.

The Renters’ Rights Bill represents a significant milestone designed to enhance the rights and protections of tenants in the rental market. This comprehensive bill aims to foster a more balanced and fair rental sector, ensuring that tenants can enjoy greater security and equitable treatment. It is likely to become law in late 2025.

Owning a buy-to-let property in your sole name versus through a limited company each has its own set of advantages and disadvantages.

Data from Rightmove shows that Sunbury-on-Thames in Surrey was the number one house price hotspot in 2024. The prices in this area climbed an impressive 12.5% - increasing from an average price of £527,005 in 2023 to £592,926 in 2024.