Spring West Country Property Market Report 2025

The UK housing market performed better than expected in 2024, and 2025 is set to follow a similar trend, according to The Guild of Property Professionals. Despite the Bank of England lowering its GDP growth forecast to 0.75%, the economy is still expected to support moderate house price increases, with stronger growth anticipated beyond 2025.

Interest rates are expected to decrease gradually, with a year-end forecast of 3.75%. Mortgage approvals and sales volumes have recovered to pre-pandemic levels, with December 2024 recording 88,200 transactions. Buyer demand, new listings, and agreed sales all saw significant growth in early 2025 compared to the previous year.

Mortgage rates have improved, averaging 4.5% in December 2024, with some fixed rates dropping below 4% for buyers with large deposits. This has encouraged first-time buyers, who made up 29% of new mortgage lending in 2024, the highest proportion since records began in 2007. In contrast, buy-to-let mortgages accounted for only 8% of new lending.

House prices rose by 4.6% in 2024, with the strongest growth in Northern Ireland, Scotland, and the North East. Prices are expected to continue rising in 2025, particularly in higher-priced regions like London, benefiting from improved affordability. The UK consensus forecast predicts house price growth of 3.1% in 2025 and 3.7% in 2026.

Buyer confidence has improved, but the increase in available properties has moderated price growth in some areas. The number of homes for sale has reached a 10-year high. Cash sales, which peaked at 34% in 2023 due to reduced mortgage lending, have since declined to 31% in 2024 and are expected to return to the long-term average in 2025.

Overall, with improving mortgage affordability and steady economic growth, the UK housing market is expected to remain resilient in 2025, although regional variations in price trends will persist.