Experts predict a significant increase in house prices in 2025, outpacing inflation rates. This could pose challenges for first-time buyers who may need larger deposits to afford homes. While mortgage rates are expected to fall, leading to lower monthly repayments, the faster growth in house prices could make homeownership more difficult.
House prices will rise again in 2025 - with experts predicting growth higher than the level of inflation. Experts predict multiple cuts to interest rates next year, with this feeding through to cheaper mortgages. Between September 2023 and 2024, there was an increase in house prices of 2.9 per cent, according to the Government’s Land Registry. This was higher than inflation, but lower than average wage rises.
And most forecasters predict there will be faster growth than this in 2025, which could make it more challenging for people to buy for the first time, as they will need bigger deposits to afford homes. Falling mortgage rates could mean that once homes are bought, the monthly repayments are a little lower, however. The Centre for Economics and Business Research (CEBR) predicts that there will be house price growth of 4.1 per cent across the UK in 2025. Savills estate agency is forecasting growth of 4 per cent, while Hamptons suggests it will be at a lower rate of around 3 per cent.The Bank of England’s Monetary Policy Report, published in November, it forecast that inflation would reach 2.7 per cent in the final quarter of next year, which means house prices will grow faster than prices generally, if the expert predictions are correct.The base rate is at 4.75 per cent, while inflation is running at 2.6 per cent. Experts have previously said that some of the Government’s policies could slow house price growth in 2025 and beyond. But this is not likely to mean prices will fall for those looking to get on the ladder, it just means they will grow at a slightly slower rate than otherwise. In October, it was announced that second-home buyers, landlords and companies will pay an increased higher rate of stamp duty on additional properties, while the threshold under which buyers need to pay the higher rate will be lowered
House Prices Inflation Mortgage Rates First-Time Buyers Property Market
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