Experts are cautiously optimistic that 2025 could be a buyer’s market.

However, those looking to purchase a property need to be aware of the changes in stamp duty – particularly the relief for first time buyers scheduled to end in April – and potentially high interest rates.

Why 2025 could be a buyer’s market

With a greater selection of homes available and extended selling times, homebuyers are likely to maintain an advantage in negotiations.

With mortgage rates set to fall, and while they won’t be falling to historic lows, they should boost buyers’ confidence and affordability.

Changes to Stamp Duty Land Tax (SDLT) set to come into play in April – which will see a higher rate of tax paid by buyers – means that we are likely to see a particularly busy first three months of the year as buys try to avoid higher charges.

London could also see a resurgence in its property market. Over the past five years, the average asking price for homes in the capital has increased by 12 per cent, whereas the national average has risen by 21 per cent.

Factors, such as the reintroduction of a five-day office-based working week for some companies, coupled with renewed interest from international buyers, are anticipated to boost demand in the capital.

Will there be an increase in first time buyers purchasing property?

First time buyers from April will see the SDLT rate threshold drop from £425,000 to £300,000.

Considering the average house price is around £270,000, there are potentially a lot of first-time buyers who will be now paying SDLT, particularly those who are looking to buy in more expensive areas.

However, other changes to SDLT, particularly for those looking to buy a second residential property, which adds 5 per cent on top of standard SDLT rate, will deter landlords from adding to their property portfolio.

This may mean that there is an increase in properties available on the market, and more opportunity for first time buyers to get on the housing ladder.

What does the market look like for renters in 2025?

Following several years of significant rent hikes, 2024 saw the smallest increase since 2021.

The average monthly rent outside London has reached £1,339, reflecting a 4.5 per cent rise from last year.

Looking ahead, advertised rents are expected to grow by three per cent both inside and outside London in 2025.

Rents of course have been rising higher than wages in recent years.

As renters hit an ‘affordability ceiling’—the point at which higher monthly rents become unaffordable—and landlords seek to keep their properties tenanted, 26 per cent of rental homes have seen their asking rents reduced, up from 23 per cent at the same time last year.

Landlords looking to advertise rental properties in the coming months will need to find a balance between raising rents to cover increasing costs and maintaining affordability for tenants.

If you are considering what the best cause of action to take in the 2025 housing is, whatever your motivations, it is important to consider the advice of a legal expert who will help you navigate rule changes and make sure you are complaint.

Get in touch with our team if you are looking to purchase or rent out your property in 2025.