Approximately 1.15 million property transactions are anticipated, marking the highest level of activity since 2021.
The predictions are part of Rightmove’s 2025 housing market forecast, which expects a year of increased property transactions and moderate price growth, despite economic uncertainties.
The portal’s property expert, Tim Bannister, said: “Stamp duty charges arising from 1st April means we are likely to see a particularly busy first three months of the year as first-time buyers, home-movers and investors all try to complete on planned purchases and avoid higher charges.
“The effects of stamp duty rising will be felt for the rest of the year too, and we may see some negotiation tactics play out, particularly on properties close to the £300,000 mark, as both buyers and sellers try to mitigate their higher costs through the price agreed.”
London, which has seen slower price growth compared to the rest of the UK in recent years, could experience a market resurgence, according to the property portal. It suggested that returning office workers and international buyers could reignite demand, with London’s price growth expected to match or surpass the national average.
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Mortgage rates expected to fall
Rightmove forecasts that mortgage rates will fall, with average two- and five-year fixed rates settling around 4% by late 2025, down from current levels of 5.08% and 4.83%, respectively. This improvement is expected to boost buyer confidence and affordability.
However, uncertainties such as inflation and global economic pressures could still impact rate trends. Rightmove’s mortgage expert Matt Smith explained: “It is likely to be a mixed year for the market. Those who took out peak-mortgage rate two-year fixes after the mini-Budget will see their deal come to an end and will likely find themselves with lower costs next year.
“Combined with wage growth, they may feel some significant affordability improvements. By contrast, many movers will be rolling off a relatively low five-year fixed rate agreed during the busy market of 2020 and will see costs rise.”
First-time buyers and remortgagors driving market
Despite the planned stamp duty increase from April 1st, first-time buyers are expected to remain active due to rising rents and improved mortgage availability.
The number of first-time buyers that are active in the market and sending enquiries to agents is currently 13% ahead of the same period last year, said Rightmove.
The remortgaging sector is also set to become a major focus for lenders, said added the property portal. Many fixed-rate deals from the pandemic era and post-mini-Budget period are due to mature next year, prompting competition among lenders.
