In December, the average price of homes in the UK experienced a notable decline, with property website Rightmove reporting a month-on-month drop of £6,395, equating to a 1.7% decrease.
However, the current average asking price now stands at £360,197. While this seasonal dip aligns with typical market trends during the festive period, the overall activity remains significantly stronger than in the same period last year.
As potential home movers prepare for the traditionally busy Boxing Day, many buyers and sellers are expected to browse online listings. Looking ahead to 2025, Rightmove anticipates a 4% rise in new seller asking prices, buoyed by anticipated reductions in mortgage rates.
1.4% Annual Price Increase Aligns with 2024 Projections
Tim Bannister, the director of property science at Rightmove, remarked, “Despite this monthly decline, prices have increased by 1.4% compared to December 2023, which is consistent with our projection of a 1% rise for the current year.
We are optimistic about the upcoming Boxing Day surge in home-moving activity, which has increasingly become a pivotal moment in the housing market calendar.”
Stamp Duty Deadline Looms: Pressure Mounts on Buyers and Sellers
A forthcoming stamp duty deadline poses a potential hurdle for buyers in 2025. From April, the “nil rate” band for first-time buyers in England and Northern Ireland will drop from £425,000 to £300,000.
Rightmove has noted that sellers of smaller properties in higher-priced regions, such as London and the South East, are keen to either trade up or sell before the deadline to avoid higher stamp duty costs.
Changes in Stamp Duty
- Current Nil Rate Band: £425,000
- New Nil Rate Band (from April 2025): £300,000
- Impact: Increased costs for first-time buyers in the specified regions.
Affordable Markets Show Resilience Amid Stamp Duty Changes
Interestingly, properties typically favoured by first-time buyers in more affordable areas have demonstrated resilience. For example, homes in the North East of England have seen a 1% price increase this month, indicating that these markets are likely to be less affected by the impending changes in stamp duty.
Bannister Optimistic for 2025, Cautions on Market Sensitivity
Mr. Bannister added, “Analysing our data alongside the UK’s inherent housing needs reveals several reasons for optimism as we move into next year. Nonetheless, as evidenced throughout this year, the market remains sensitive to unforeseen events, and trends can shift rapidly.”
He further noted, “The impending stamp duty changes present a significant concern, particularly for certain demographics who are more affected and eager to evade additional costs. The first quarter of 2025 will be crucial in determining how quickly the market can adapt to the new stamp duty landscape.”
Rate Cuts May Boost Market Confidence
To stabilise the market, a reduction in the Bank of England’s base rate, coupled with a decrease in mortgage rates early in the year, could enhance consumer confidence and sentiment.
Seasonal Trends in Listings
Steven Holden, director at estate agents Holden Copley in Nottingham, observed,
“December typically sees a seasonal slowdown in new listings as many focus on holiday festivities. However, we anticipate a revival in activity post-Christmas, with Boxing Day heralding the start of a bustling period.”
Rents Rise by 2.6% Annually, Marking Slowest Growth in Four Years
This report coincides with findings from Hamptons’ lettings index, which revealed that rental price growth has slowed to its lowest rate in four years as of November. The average rent for newly let properties across the UK rose by 2.6% annually, marking the smallest increase since November 2020.
Although, the average monthly rent for newly let properties reached £1,382, up £35 from the previous year. Between November 2020 and November 2024, rents surged by nearly a third (31.6%).
Rental Growth Trends
- Average Rent (November 2024): £1,382
- Annual Increase: 2.6%
- Previous Peak (November 2020): 2.4% increase
- Overall Increase (2020-2024): 31.6%
Aneisha Beveridge, head of research at Hamptons, commented,
“Current growth levels mirror those seen before the pandemic, when rent increases typically ranged between 2% and 3% annually. However, the pressures that previously drove up rents have not entirely dissipated. Tenants renewing their leases are still experiencing significant increases, although the pace of these hikes is expected to slow as their rents align more closely with market rates.”
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