The UK housing market in 2024–2025 reflects a mix of opportunities and challenges, shaped by evolving economic conditions and regional dynamics. While demand remains strong, affordability and supply constraints continue to impact buyers and developers alike.
London stands out as a unique market, with modest price growth, tight housing supply, and significant regeneration projects aimed at addressing long-term shortages. Across the UK, shifting buyer preferences, policy changes, and efforts to enhance affordability are influencing market beheavior.
This report explores the key trends shaping the UK and London housing sectors, providing insights into current developments and the future outlook.
New Homes Market Report 2024–2025
Navigating the UK and London Housing Markets: Key Trends, Regional Growth, and Challenges
UK Overview
+4%
UK-wide house price growth forecast for 2025
49%
First-time buyers account for nearly half of all UK property purchases in 2024
1.15 million
Predicted completions of homes for sale in 2025
+2.6%
Rental costs in the UK rise at their slowest rate since 2020
+7.1%
Northern Ireland house prices grow the fastest in 2024
In 2024, the availability of homes for sale has high levels, with the average number of available homes per estate agent branch significantly increased. This abundance of choices for buyers has tempered price growth but has fostered strong competition for sellers. The number of homes for sale is expected to remain high in 2025, helping to facilitate more agreed sales and contributing to a projected 1.15 million transactions this year.
UK house prices are also expected to grow by 4%, with notable regional variations. The Northwest is forecast to lead price growth at 5%, while London is expected to grow at a slower pace of 3%. This regional disparity highlights the influence of local demand and economic conditions.
First-time buyers accounted for nearly half (49%) of all property purchases in 2024, with remarkable activity in Manchester (75%) and Slough (73%) due to affordability and favourable market conditions.
Meanwhile, rental costs rose at their slowest rate since 2020, increasing by just 2.6% in 2024, signalling a cooling rental market. Northern Ireland led house price growth in 2024 at 7.1%, followed by the North (5.9%) and the West Midlands (4.7%). These trends illustrate the varied dynamics shaping the UK’s housing market as it heads into 2025.
London Market Insights
2%
London house prices increase in 2024
35,000
New housing completions in London
32%
Rate of properties listed for sale in 2024 in expensive WC postcodes in London
+1.5%
Rental growth prediction in London in 2025
London’s housing market has experienced both challenges and opportunities in recent years. Compared with five years ago, the average asking price for a home in London has increased by 12%, while Great Britain as a whole has seen a rise of 21%.
In 2024, London’s housing market continued to show mixed performance. House prices rose by a modest 2%, significantly lagging behind regions like Northern Ireland and the Northwest. Housing completions in the capital fell drastically short of targets, with only 35,000 new homes completed compared to the annual target of 80,000. Rental growth also slowed to 1.5% in 2024, a marked contrast to prior years.
The market also faced challenges from landlords exiting the sector; 32% of properties listed for sale in WC postcodes were previously rented, reflecting pressures from high taxes and regulatory changes. However, looking ahead to 2025, Rightmove predicts that London’s market may see a turning point. With major companies returning to office-based work and the enduring pull of the capital for both workers and international buyers, London’s price growth is expected to align with or even exceed national trends.
Sources: The Times, RightMove, Knight Frank London New Home Report
How Home Staging Benefits Property Owners and Developers
Did you know furnished properties…
earn 10-20% more
in rental income or sale price.
rent out 21% faster with fully dressed interiors.
attract 70-80% of tenants, including young professionals.
Home staging is a powerful tool for property developers and landlords, boosting both rental income and sale prices. Furnished properties earn 10-20% more than unfurnished ones, as they create an inviting atmosphere that appeals to potential tenants and buyers. A well-presented home feels more livable, making it easier for renters or buyers to envision themselves in the space.
Staging also speeds up the rental process—furnished homes rent out 21% faster, reducing costly vacancy periods. Additionally, 70-80% of tenants, especially young professionals, prefer furnished rentals for convenience, making staged properties more attractive in a competitive market.
For sellers, a well-staged home stands out, enhancing its perceived value and driving higher offers. In an increasingly crowded property market, staging isn’t just about aesthetics—it’s a strategic move that leads to faster deals and greater returns.
Sources: Westport Property, Property Rescue, Rocket PM
Mortgage and Stamp Duty Trends
66,500
UK mortgages approvals for house purchases in December 2024
0.25%
Cut in the Bank of England base rate from 4.75% to 4.5%
£125,000
New stamp duty threshold for non-first-time buyers from April 2025
8%
Stamp-duty free homes in London after April 2025
Recent housing and financial updates in the UK indicate significant shifts in mortgage approvals, interest rates, and stamp duty regulations. In December 2024, mortgage approvals for house purchases in the UK reached 66,500, reflecting ongoing demand in the housing market. The Bank of England made a 0.25% cut to its base rate, lowering it from 4.75% to 4.5%, potentially reducing borrowing costs and making mortgages more affordable. Additionally, changes in stamp duty regulations are set to take effect from April 2025, introducing a new threshold of £125,000 for non-first-time buyers, which may impact home affordability and transaction costs. Furthermore, 8% of homes in London will be stamp-duty free after April 2025, possibly benefiting buyers seeking reduced upfront costs.
These developments suggest a dynamic landscape for homebuyers and investors, with mortgage accessibility, interest rate adjustments, and stamp duty exemptions playing a crucial role in shaping the market. Lower interest rates might encourage borrowing, while stamp duty changes could influence purchasing decisions, particularly in London. As the UK housing market evolves, these financial adjustments will likely have a significant impact on affordability, investment opportunities, and homeownership rates across the country.
Sources: The Times, Bank of England
Key Developments and Regeneration Projects
Barnsbury Estate — 914 homes planned
Wood Wharf — 3,000 apartments under construction
White City — 2,500 homes provided
London’s skyline continues to transform through significant regeneration efforts. The Barnsbury Estate redevelopment in North London plans to deliver 914 new homes, with 60% designated as affordable housing.
In Canary Wharf, the Wood Wharf project will add over 3,000 apartments, expanding residential capacity in this iconic financial district.
West London’s White City redevelopment, which includes the BBC Television Centre, is set to provide 2,500 homes, further revitalising the area.
These projects reflect the city’s ongoing efforts to address housing shortages while incorporating modern amenities and sustainable designs.
Sources: Knight Frank London New Home Report
Future Outlook
21.6%
Projected UK house price growth over the next five years
4%
Average mortgage rates expected by the end of 2025, improving buyer affordability
£10bn
Anticipated contributions from the "Bank of Mum and Dad" to support first-time buyers in 2025
5%
Predicted drop in prime London property prices in 2025
The UK housing market is poised for steady growth, with house prices projected to rise by 21.6% over the next five years. This growth will be supported by a stable economic environment, including GDP and wage increases. Mortgage rates are expected to stabilise around 4% by the end of 2025, improving affordability and potentially boosting buyer activity.
Support from family contributions, often termed the "Bank of Mum and Dad," totalled £9.3 billion in 2024 and is projected to reach £10 billion in 2025, aiding many first-time buyers. However, London’s prime property market faces challenges, with a 5% price drop forecasted in 2025 due to higher taxes and reduced demand from overseas buyers. Regional opportunities, particularly in suburban areas near quality schools, are expected to attract strong interest.
In summary, the UK housing market is navigating a complex landscape shaped by economic factors, policy changes, and shifting demographics. While projections indicate a 21.6% rise in house prices over the next five years, affordability challenges persist, especially for first-time buyers increasingly reliant on family support. The anticipated stabilisation of mortgage rates around 4% by the end of 2025 may offer some relief, but regional disparities and policy shifts, such as changes in stamp duty and rental regulations, will continue to influence market dynamics.
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