The average price of a UK property coming to the market has taken a slight dip this month, with data showing that prices have fallen by £6,395 or 1.7% compared to last month's figures. This decrease brings the typical cost of a home down to £360,197, as reported by Rightmove, one of the leading property portals in the UK.
This monthly drop is not unexpected, as it aligns with the usual seasonal pattern observed during December. Despite this temporary slowdown, experts at Rightmove note that prices are still 1.4% higher than they were in December 2023, demonstrating a steady growth trend over the past year.
Moreover, Rightmove's data indicates that buyer activity remains strong, with sales agreements being made at a rate 22% higher than last year, and new buyer demand increasing by 13%. This resilience suggests that the property market is showing signs of adaptability in the face of economic headwinds, such as inflation and interest rates.
In fact, Rightmove anticipates that this trend will continue into the new year, with a predicted "traditional Boxing Day bounce" expected to boost activity even further. Tim Bannister, director of property science at Rightmove, notes that early birds who start searching for properties immediately after the festive period are likely to be rewarded with an abundance of fresh choices.
Interestingly, the impending stamp duty deadline of 31 March is influencing seller behavior, particularly among those selling smaller properties in higher-priced areas. These sellers are attempting to beat the deadline and avoid the increased tax burden that comes with it. This move reflects a pragmatic approach from vendors seeking to minimize their financial liabilities.
The Bank of England's decision on interest rates is also closely watched by industry professionals, as a potential rate cut could provide much-needed relief to the market. Rightmove highlights that a bank rate reduction coupled with some mortgage rate falls would be beneficial in stabilizing the market and restoring consumer confidence.
Furthermore, separate research conducted by Rightmove projects that national average asking property prices will rise by 4% in 2025. This growth is seen as a positive development, indicating a recovery from the slowdown observed in recent months.
Additionally, UK Finance has released figures showing that mortgage lending for buying a home is expected to increase by 10% to £148bn in 2025. The finance trade association attributes this projected rise to easing interest rate and cost pressures, which will contribute to improved market growth. According to UK Finance's estimates, total mortgage lending for house purchases will reach £135bn for 2024, representing an 11% increase from the previous year.
The combination of these indicators suggests that while there are challenges ahead, the property market is expected to experience a rebound in 2025, driven by favorable conditions and a gradual improvement in mortgage affordability. As the market adjusts to the impact of budget measures and other headwinds, it remains to be seen how these factors will shape the trajectory of the UK's property sector.
The latest data from Rightmove highlights a complex picture for the UK property market. Despite a temporary dip in prices this month, experts predict further growth in 2025, driven by increased buyer activity and easing interest rate pressures. As the market navigates the challenges presented by economic headwinds, it is clear that both buyers and sellers will need to adapt their strategies to maximize their chances of success. With the looming stamp duty deadline and the Bank of England's decision on interest rates pending, the coming months will be crucial in determining the trajectory of the UK property market.