£ 798, 000 £ 1, 163, 561 - 7. 6%
648 £ 40b n 15, 832 M ORTGAGE AP P ROVALS (JAN)
SPRING MOMENTUM
The market continues to blossom, with momentum spilling over from 2024. Interest rates remain significantly lower than a year ago, providing a strong foundation for growth throughout 2025.
SOLID TRANSACTION LEVELS
There were 95,110 transactions in January, a 14% rise compared to a year earlier and just 1% lower than in December (HMRC). After a steep rise in October and a fall in November, this indicates a stabilisation in transaction levels. Sales agreed are 10% higher than a year ago, with transaction levels forecast to be 5% higher over 2025 reaching 1.15m (Zoopla). Demand and supply have risen across all property types, but market nuances remain. Detached houses are increasingly popular, with an 18% rise in the demand-tosupply ratio year-on-year, while flat demand has marginally declined since January 2024 (TwentyCi). However, the time to secure a buyer continues to increase, taking 77 days in January, the sixth consecutive monthly increase and up from 72 days in December (Rightmove).
PRICES
The annual rate of house price growth remained broadly stable in February at 3.9%, compared with 4.1% in January (Nationwide). Strong earnings growth is supporting activity, but a greater supply of homes for sale and the impeding Stamp Duty deadline is expected to keep price inflation in check. Over half (56%) of agents expect prices in the sales market to stay the same over the next 3 months, while 38% expect prices to increase (Dataloft by PriceHubble poll of subscribers).
In England and Wales, the average price of a prime market property is £1,163,561, down 7.6% year-on-year, with house price inflation continuing to follow a north/south divide.
MORTGAGE METRICS
CPI inflation rose by 3% in the 12 months to January, a higher-than-expected jump from December which takes inflation further away from the Bank of England’s target. Governor Andrew Bailey warned that the Bank’s approach to future cuts would be “gradual and careful”, which could result in pressure on mortgage rates. The mortgage market remains busy, driven by first-time buyers rushing deals before stamp duty changes and needs-based buyers who delayed decisions during 2024’s volatility. Mortgage lending picked up again in January, to a net total of £4.2bn, continuing the upward trend observed since April 2024. Mortgage approvals decreased by 0.5% in January, but remain 18% higher than a year ago (Bank of England). The Bank of England cut interest rates to 4.5% at the start of February and several major banks have cut rates since then. This comes as a welcome relief after fixed-rate mortgages rose in early 2025, with major lenders like NatWest, Halifax, HSBC, Santander, and Barclays reversing some of the cuts made in late 2024 following gilt yield spikes. Now, this trend appears to be shifting, with the lowest fixed-rate mortgages dipping below 4% for the first time in months as competition among lenders intensifies.
HOMEOWNERSHIP TRENDS
The average owner occupier spends 17.6 years in their home, so picking well is important. Owner occupiers who are mortgage free have been in their property the longest, staying an average 23.8 years. Those buyers with a mortgage stay a shorter, but still significant, 9.3 years on average (Dataloft by PriceHubble, English Housing Survey 2023–2024).
£ 5 5 0 ,0 0 0
£ 7 8 0 ,1 1 1
+ 4 .4 %
£ 3 6 1
£ 5 1 9 ,0 0 0
£ 7 0 4 ,4 5 9
-1 .9 %
£ 3 6 9
£ 5 7 5 ,0 0 0
£ 7 5 4 ,0 7 1
-2 .5 %
£ 3 8 2
£ 4 7 5 ,0 0 0
£ 6 1 3 ,4 3 4
-3 .3 %
£ 3 3 1
£ 7 3 5 ,0 0 0
£ 9 8 7 ,9 8 4
-6 .2 %
£ 4 8 5
£ 9 2 0 ,0 0 0
£ 1 ,2 8 9 ,5 9 7
-8 .6 %
£ 5 7 0
£ 4 1 3 ,0 0 0
£ 5 4 7 ,2 2 5 -1 .6 %
£ 2 9 5
£ 4 9 7 ,0 0 0
£ 6 6 1 ,6 0 4
-5 .1 %
£ 3 4 6
£ 5 2 0 ,0 0 0
£ 6 8 3 ,5 1 7
-3 %
£ 3 3 5
£ 7 9 3 ,0 0 0
£ 1 ,0 7 5 ,4 9 3
-4 .2 %
£ 5 3 1
£ 1 ,5 4 0 ,0 0 0
£ 2 ,4 4 2 ,9 7 5
-1 5 .2 %
£ 1 ,2 0 8
£274,945
£798,000
£1,163,561
£230,438
£741,000
£1,125,585
£221,205 £676,000
£1,044,824
£270,396
£650,000
£892,547
£429,741
£1,040,000
£1,513,290
£285,352 £806,000 £1,173,466