January 2025 Property Market Insights

Welcome to the January 2025 edition of Property Market Insights by Hoopers Estate Agents in Neasden. We have gathered insights from UK experts to provide a comprehensive overview of how the market concluded in 2024. We also give insights into what’s in store for the property market 2025.

December's figures reflect the property market's performance in December 2024, with the most significant indices showing positive year-end growth.

Nationwide reports that UK house prices closed out 2024 up +4.7% compared to December 2023, with a modest month-on-month increase of +0.7% after seasonal adjustments.

Halifax's data tells a slightly different story, with their average house price settling at £297,166, showing a minor monthly decline of -0.2% but maintaining healthy annual growth of +3.3%.

A strong end to 2024

The sales market demonstrated remarkable resilience throughout December, with Zoopla reporting the largest pipeline of sales progressing to completion in four years.

As we enter 2025, 283,000 sales worth £104 billion are moving through the system, representing a substantial +30% increase compared to last year.

At the start of 2024, interest rate cuts hadn't commenced, inflation was double the target rate, and economic growth wasn't strong enough to help drive house price growth.

By the end of 2024, a range of those economic drivers had improved, and contrary to pessimistic consensus forecasts at the start of the year, house prices had grown by 3.7%.

Lower inflation has been critical to that change, allowing the Bank of England to start cutting interest rates. Five-year mortgage rates are improved on this time last year and significantly improved on two years ago.

Economic growth has been sluggish, and there have been points throughout the year that caused growth to pause (uncertainty surrounding the General Election in July and the Budget in October). Still, nevertheless, economic growth has been more substantial in 2024.

Regional variations continued to shape the market landscape in December, with northern regions outperforming their southern counterparts. Northern Ireland maintained its position as the best-performing area for the second consecutive year, whilst East Anglia experienced more challenging conditions.

Buyer activity

December's buyer activity showed promising signs. Rightmove reports a 13% increase in new buyer demand, whilst RICS data indicates new buyer enquiries are up with a net reading of +12%.

However, buyers displayed increased price sensitivity, particularly following the recent budget, with many securing properties below the asking price in the fourth quarter of 2024.

Seller confidence and asking prices

December saw continued growth in seller activity, with new instructions rising to +17% from +14%, according to the Royal Institute of Chartered Surveyors (RICS).

However, Rightmove notes that new seller asking prices dropped by a seasonal 1.7% (-£6,395) to £360,197, though prices still ended the year +1.4% above December 2023. Interestingly, first-time buyer homes in the North East bucked this trend, showing a 1% increase in December.

Looking ahead to 2025

2025 looks set to be a similar year for the housing market: economic forecasts currently suggest a little potential upside to GDP growth, continued lower inflation (although sitting just above target) and further interest rate cuts.

The outlook for the new year seems cautiously optimistic, though challenges may arise. Rightmove forecasts a +4% rise in new seller asking prices over 2025, whilst Zoopla predicts a continued recovery in sales volumes, reaching 1.15m with modest house price inflation of 2.5%.

However, upcoming Stamp Duty changes could create market volatility, particularly in the first quarter of 2025. Robert Gardner, Chief Economist at Nationwide, suggests we might see a transaction surge before the changes take effect, followed by a potential slowdown.

Summary

December's figures offer an encouraging conclusion to 2024, with the property market demonstrating remarkable resilience despite the challenging economic backdrop.

Despite ongoing regional disparities and price-conscious buyers, a robust sales pipeline and rising buyer demand indicate we are entering 2025 on solid ground. The main challenge in the coming months will be to navigate the expected changes to Stamp Duty while sustaining this momentum.

Moving Home in North London?

Please contact the team for a more localised property market review of your specific postcode. We’ve been selling homes in Neasden and the surrounding areas for over 40 years and would be delighted to assist you.

Get in touch today on 020 8450 1633. Click here for a free, instant online valuation of your home.

Note: The information in this article is based on data as of January 2024 and may change. Always seek professional advice for your specific circumstances.