UK house price predictions for 2025: with pay rising and rates falling, they’ll just keep going up
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Nothing seems to stop the relentless march of property values, even with a stamp duty increase looming. It’s been a bumpy ride for the housing market in recent years, after Liz Truss’s disastrous mini budget of September 2022 created a surge in borrowing costs that have cost many households dearly.
But despite elevated mortgage and rent costs, the market this year has turned out to be “surprisingly resilient”, according to Nationwide building society. Experts had expected house prices to stay flat or fall, but average prices are expected to have risen by more than 3% in 2024, after falling by 1.4% in 2023.
Looking ahead to the new year, house prices are predicted to grow at a similar or slightly faster rate in 2025 – before accelerating to as much as 5.5% in 2026 – while record rent increases are likely to return to more normal levels, lenders and estate agents predict.
The for-sale market should get a boost as interest rates come down – albeit at a slower rate than was previously expected as inflation proves sticky – and people’s incomes could rise faster than house prices. The average price of a UK home now nears £300,000 according to the lender Halifax, stretching affordability for many potential buyers. First-time buyers in particular have struggled to save up for a deposit after record rates of rental growth in recent years.
