A number of factors are contributing to the optimistic outlook for the UK property market.
Notwithstanding the market's recent volatility, indications point to a stabilisation and possible increase in home prices in 2025. While uncertainties may persist, the housing market is poised for positive movement next year, underpinned by strong demand, government support, and a shift towards more sustainable living.
Strong Demand for Housing:
The demand for housing in the UK is still strong. Prices are still being driven up by the persistent lack of available housing, especially in high-demand locations like London, the South East, and important regional cities like Manchester and Birmingham. Price increases in formerly less desirable areas are also being exacerbated by the growing trend of people leaving city centres for more suburban or rural areas after the pandemic.
Economic Stabilisation:
Property market confidence is expected to rebound as the economy stabilises after recent volatility. The cost of living and inflationary pressures continue to be major issues, but the housing market will be supported by forecasts of modest wage and employment growth. Re-entering the market may also be facilitated by the gradual lowering of mortgage rates, especially for first-time purchasers.
Government Support:
Government initiatives to increase housing affordability and encourage building will remain important. Homeownership will be promoted by programs like the First Homes Scheme and the ongoing Help to Buy initiatives. Furthermore, planned infrastructure projects like HS2 are probably going to raise local property values.
Increased Focus on Sustainability:
As the UK works towards its net-zero targets, there is an increasing demand for energy-efficient homes. Demand is predicted to rise for properties with high sustainability ratings or those that use green technologies, which will support price increases overall.
