There is optimism in the UK housing market as we look forward to 2025

2024 has been a better year for the UK economy as GDP growth showed continued resilience to stay positive after falling into the red during the last two quarters of 2023. Buoyed by interest rate cuts, house price growth, and increasing rents, homebuyers and property investors are flipping the calendar with much more enthusiasm than last year.

Positive forecast amidst a jittery Budget phase

Despite an unusual drop of 1.4% (-£5,366) in the average new seller’s asking price in November, Rightmove predicts that prices will grow by 4% in 2025, marking the portal’s highest prediction since 2021.

Last month’s fall, linked to the pre- and post-Budget jitters, was steeper than the usual seasonal slump of 0.8%. Yet, it hasn’t discouraged home buyers after all, as the number of sales agreed is still 26% higher than what it was around this time last year.

The number of sellers coming to the market is also 6% more than last year, with real-time data showing early signs of an uptick in buyer demand fuelled by rate cuts. However, with seller competition at its highest in a decade, those keen on a quick sale must offer well-presented and well-priced homes to a price-sensitive market.

Despite price rises, inflation is lower than last year

At 2.3%, consumer price inflation in the UK for October was higher than the Bank of England’s (BoE) 2% target for the month. Although higher than September’s 1.7%, CPI is still half of what it was last year when it reached 4.6%. Furthermore, the Sterling strengthened by almost a third of a cent against the U.S. dollar before losing most of that rise to the slower pace of rate cuts and drop in bond prices.

IMF increases growth forecast amidst a housing market boom

The International Monetary Fund (IMF) increased its 2024 growth projections for the UK economy from 0.7% to 1.1%. This increase comes at a time when sales activity in the property market is at its highest since reaching its peak in 2020. Currently pegged by Zoopla at £113bn, the property sales pipeline is 30% higher than a year ago.

Encouraged by consecutive rate cuts in August and November this year, first-time buyers (FTBs) are the largest buyer group in 2024 contributing to 36% of the total sales volume. Despite the Budget decision not to extend current stamp duty relief thresholds, a vast majority of homebuyers haven’t altered their plans.

In a recent survey conducted by us, only 5% of respondents said that they would postpone their plans to purchase indefinitely, compared to 73% of homebuyers who are eager to move ahead with their purchase plans. In fact, our latest research makes an ironic reveal that 342% more property sales were completed on ‘Buy Nothing Day’ (29th November) compared to the rest of the month.

High-yielding London developments showcased in Malaysia

Our team in Malaysia presented two high-yielding London developments by Berkeley Group’s St Edward to investors this November. These exciting developments included Oval Village in Vauxhall (Zone 1) and The Exchange in Watford (Zone 7). While Oval Village is a short walk from Westminster, investors can secure yields of up to 6% by investing at The Exchange.

Hong Kong buyers show interest in Dubai and Swiss properties

Our Hong Kong team showcased some beautiful villas and apartments in Dubai by DAMAC, offering investors 10-year UAE residency through the Golden Visa scheme. They will also preview a branded hotel residence in Andermatt, Switzerland, priced from CHF 595,000*. Managed by Orascom Development Holding, this project offers luxury living within a 5-star hotel environment.

Dubai property open house in India

Our India office will host an exclusive open house featuring luxury Dubai properties across prime locations of the sought-after Emirate on the 14th and 15th of December. Attendees can explore high-yield Dubai developments and learn about acquiring a Golden Visa through property investments via interactive one-on-one consultations with our property experts.

UAE properties and Golden Visa consultancy held in Indonesia

Our office in Indonesia recently held a special UAE Golden Visa seminar along with private one-to-one consultancy sessions in partnership with DMC Global. They presented a collection of brand-new developments across Dubai, Abu Dhabi, and Ras Al Khaimah, which was assisted virtually by our team from our Dubai office.

Showcase of London, RAK properties and more in Singapore

Our Singapore office had a busy month as they showcased a new phase at Berkeley’s London Dock in Zone 1 while also wrapping up an insightful seminar on the impact of the Autumn Budget for property investors. The team also showcased the stunning new Nikki Beach Residences in Ras Al Khaimah, offering opportunities tied to the UAE’s first legal casino by Wynn Resorts, set to open in 2027.

Rental markets continue their positive run

While average advertised rents in London hit a new record at £2,694 per calendar month, a 2.5% growth from last year, rents outside the capital hit a 19th consecutive quarterly record of £1,344, reflecting a 5.2% annual growth.
Although the supply of rental housing increased by 13% year-on-year it is still 27% below the pre-pandemic levels of 2019 highlighting the sustained pressure on the market. The average number of enquiries per property has dropped to 15, down from 23 last year but nearly double the 2019 average of 8.

Landlords remain optimistic as CGT rates stay untouched

The looming fear of a potential increase in capital gains tax didn’t materialise, bringing a sigh of relief to landlords across the country. A recent survey we did revealed that 84% of landlords plan to retain their current portfolios, while a further 4% intend to expand it. Only 12% of landlords had plans to liquid their investments.

At Benham & Reeves, we bring you the best London properties. Whether you have a property to sell or let or are interested in exploring new investment opportunities, get in touch with us today.