£800,000 £1,161,375 -7.3%
£648 £41.5bn 16,399
BUYER’S CHOICE
Market activity has remained buoyant as buyers rush to beat the stamp duty deadline. House price growth remains steady, driven by renewed demand for larger properties, while record levels of supply mean it’s very much a buyer’s market.
RESILIENT MARKET
The Bank of England have held interest rates at 4.5% in its second meeting of the year, amid persistent inflation, which after trending lower for most of 2024 has ticked up recently to sit at 2.8% in February, above its 2% target ¹. In the Spring Statement, the official economic growth forecast from the Office for Budgetary responsibility for 2025 was halved to 1% amid these continued inflationary pressures and other global economic headwinds.
However, the housing market continues to display resilience. In February, 108,250 transactions took place, up around a quarter on the same month last year and 13% higher monthon-month as buyers rushed deals through before April’s stamp duty deadlines². Sales agreed are up 5% on an annual basis, with sales volumes expected to grow 5% over 2025 taking sales back towards their long-term average of 1.195m a year ³. Mortgage approvals, an indicator of future market activity, have tempered very slightly in the latest month’s data but remain 8% higher year-on-year4
SUPPLY REACHES RECORD HIGHS
A spring uptick in supply has pushed competition in the sales market to its highest level in a decade 5 . While buyers entering the market this spring may miss out on the current stamp duty deadline, they’ll benefit from the broadest selection of homes available at this time of year since 2015. Over half (52%) of agents say supply has risen compared to three months ago 6 . An increase in available homes for sale is giving buyers more choice and boosting their negotiating power, leading to greater price sensitivity and keeping price growth in check.
PRICE VARIANCE BY PROPERTY TYPE
The average house price rose to £268,548 in January, a 4.9% year-on-year increase, the highest rate in two years 6 . Terraced houses had the strongest annual growth of 5.9%, while detached properties increased by 4.7%. On the other end of the scale, flats saw the most muted growth, but certainly in solid positive territory at 2.3%. Higher borrowing costs last year meant that less expensive properties were in demand, however now interest rates have started to ease, and trends such as a continued desire for outside space and an increase in those looking for parking spaces and electric vehicle charging7 have meant that larger homes with more space are a key component of stronger demand.
In England and Wales, the average price of a prime market property is £1,161,375, softened by -7.3% year-on-year.
SPRING STATEMENT
The Office for Budgetary Responsibility (OBR) forecasts in the recent Spring Statement suggest that housebuilding levels in the UK could rise to more than 305,000 by 20298 . 2024 levels were around 244,000, with the prior peak in 2019 when housebuilding reached 287,000. The OBR modelling suggests that government reforms to planning policies last year will have a ‘material’ impact on housebuilding numbers. Indeed, 64% of developers expect housebuilding to increase within 12 months9. However, this is a slow process, and it will take time for planning reform to reach through to delivery of new houses, with housebuilding levels forecast to fall further before they improve.
¹ONS ² HMRC ³Zoopla 4 Bank of England 5 Rightmove 6 Dataloft by PriceHubble, ONS 7Zoopla 8 Spring Statement, OBR Historic data is for England, Wales and Scotland 9 Shawbrook Bank
£550,000
£780,164 +2.6%
£361
£525,000
£705,815 -1.9%
£370
£578,000
£761,240 -1.5%
£385
£480,000
£617,897 -2.5%
£332
£742,000
£995,467 -4.9%
£486
£925,000
£1,295,987 -8.2%
£571
£414,000
£547,066 -1.7%
£293
£500,000
£662,008 -5.3%
£348
£525,000
£689,075 -2.4%
£334
£800,000
£1,079,895 -3.1%
£530
£1,540,000
£2,439,485 -16.1%
£1,214
£277,187
£800,000
£1,161,375
£232,933
£748,000
£1,121,476
£222,750
£678,000
£1,045,991
£271,660
£651,000
£902,240
£431,168
£1,040,000
£1,509,744
£287,477
£810,000 £1,172,366
