After a better-than-expected year, housing market outlooks for the UK are positive

The housing market is always a major point of interest in the UK. For many, it’s an indicator of the health of the economy, with homeowners wanting to know that their multi-decade investments are going to end up being worthwhile. With a non-Conservative government for the first time in 14 years – which featured five prime ministers – many expected the changes to have an impact on the market.

Although not entirely because of the change in power, most expected a downturn in the property market as the year progressed. However, with over six months in the book, experts are now indicating that forecasts are positive and transactions are still increasing, even with the market set to change course again.

State of play in the UK market

The UK housing market has changed tremendously over the last few years. Average house prices were surging through the first couple of years of the decade, with estate agents not being able to handle the extra volume, while simultaneously looking to capitalise on the trend by offering their services to just about every homeowner. Then, the mini-budget happened, costing Liz Truss her job and making her the shortest-serving prime minister.

That was in September 2022, and it sent house prices and market activity through the floor. It’s been a slow and steady rebuild since, and during this rebuild, newer, more convenient house-selling options have arrived for people thinking: "It could be simpler to just sell my house for cash to online companies, instead of searching for a buyer in a slow market." These online property-buying companies have helped to inject some activity into the market by providing homeowners a more efficient way to offload their homes, without worrying about time-consuming property chains or estate agent fees.

However, the UK property market is faced with a new concern, with Chancellor Rachel Reeves announcing that stamp duty will be going up for companies, landlords, and second-time buyers. It remains to be seen whether this means the housing market is heading for a downturn, or will continue to grow.

Optimism going forwards

Given that the new stamp duty raises are targeting current property owners or people who don’t need somewhere to live, those who still want to get onto the ladder can do so under the same conditions as before. For first-time buyers, the top end is currently £425,000 to avoid stamp duty completely, but that’s likely to come down to former levels of nearly £300,000 in March 2025.

Considering that most people trying to get on the property ladder will not go over the £425,000 mark, it's possible that property sales could continue to increase well into 2025. House prices have seen an average annual increase of 3.4%, according to official UK government statistics, along with a 30% rise in property sales from 2023.
Overall, house prices continued to increase in 2024, and even with changes coming in 2025, experts suggest the market is robust enough to carry on recovering.

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