It’s that time of year, when Business Link Magazine invites the region’s business leaders to offer up their predictions for the year ahead.
It has become something of a tradition, given that we’ve been doing this now for over 30 years.
Here we speak to Iain Hibbert, CEO at Devello Group.
In 2025 the UK property market is projected to experience moderate growth, influenced by factors such as easing borrowing costs, stamp duty changes and regional variations. However, these factors are susceptible to change as the impact of the Autumn budget works its way through. Key predictions include:
Mortgage Rates: Average two- and five-year fixed mortgage rates are projected to decrease to around 4% by the end of 2025, enhancing buyer affordability and confidence.
House Price Growth: House prices are expected to rise by 2% to 4% in 2025, driven by reducing mortgage interest rates.
Stamp Duty Land Tax Changes: From 1 April 2025 SDLT thresholds will be lowered, increasing moving costs for many buyers. This may lead to a surge in transactions before the deadline followed by a potential slowdown.
Investor Considerations: Increased SDLT surcharges for second homes and potential regulatory changes may influence investment decisions, particularly in the buy-to-let sector.
Rental Market: Rents are forecasted to rise by approximately 17.6% between 2025 and 2029, outpacing wage growth, due to persistent supply-demand imbalances.
Planning and Development: Due to the significant “shake up” introduced in the form of the new National Planning Policy Framework 2024, and the Government’s pledged commitment to delivering 1.5 million new homes, activity in this sector is expected to be both significant and buoyant with land promotion taking centre stage. This may be hampered however by the ability of the planning system to cater for the increased volume of applications and appeals.
Overall, we think the 2025 UK property market is set for steady growth, with regional disparities and policy changes playing significant roles in shaping market dynamics, despite what is expected to be a year of general economic stagnation.
