One in ten estate agents expect to see an increase in property sales over the next few months. At the same time around one third of agents predict they’ll get busier as the year progresses.

The news was garnered from the latest report compiled by the Royal Institution of Chartered Surveyors (Rics), while the growing optimism is down to last week’s cut in interest rates by the Bank of England. A further interest rate cut is expected this year, making mortgage rates even more affordable for prospective buyers.

Mortgage approvals increase 28%

Rics say it’s the ninth month in a row that sales instructions have increased. With an average 25 transactions per agent, it’s the highest figure since the start of lockdown in Autumn 2020. Meanwhile, listings are averaging around 45 properties per branch. 

Recent statistics from the Bank of England show mortgage approvals are also on a high – 28% up on the same time the previous year.

Edinburgh is top property investment city

Meanwhile, Scotland’s capital city remains the top city for property investment. This is followed by Glasgow, Manchester and London. The Colliers’ Top UK Residential Investment Cities survey is carried out every six months and shows there has been little movement since last summer. 

The biggest mover was Reading. The city fell out of the top 10 but is back at number five, thanks to an increase in new business in the area.  Conversely, it was a lack of new business that caused Oxford to fall from fifth to ninth in the list. The other nations were represented by Belfast (in seventh position), and Cardiff in tenth.

Andrew White, head of UK residential at Colliers, said: “…there’s been a period of stability in the UK housing market, with locations that have been sure investments in recent times remaining at the top.”

The report looks at 20 cities in the UK, grading them against indicators such as population growth, leisure facilities, GDP, infrastructure, the number of multinational companies and EPC rankings for private rentals. 

Nationwide’s latest figures show a monthly rise in property prices of just 0.1% for January this year. That’s lower than previously predicted and an indicator that the cost of living and higher mortgage interest rates are still impacting would-be buyers.

Despite this, the figure is still 4.1% higher than house prices a year ago. It brings the cost of the average UK property to £268,213, according to the mortgage lender. Nationwide predict prices to rise by between 2% and 4% this year.

Only last week, data from online property portal Zoopla showed that January 2025 was already faring better than January 2024 and 2023. Demand was up 13% and 10% more properties were available for sale.

Quarter percentage cut expected to loosen mortgage rates 

In terms of mortgage interest rates, analysts a predicting a quarter percent cut in the Bank of England base rate this Thursday. That would bring the figure to 4.5%. A total of three interest rates cuts are expected by the end of the year, so that affordability should improve for many house buyers. Certainly, current mortgage interest rates are nowhere near the 6.22% they reached in the summer of 2023, yet the 1.1% of summer 2021 remains a distant dream for many.

The market is currently experiencing a surge in sales, thanks to the rush to beat the Stamp Duty changes on April 1. Then, buyers will have to pay Duty on properties which are less expensive than at present. Meanwhile, property costs are historically high compared to earnings. The current property-wages ratio is 5.0 whereas typically the average is 3.9.

Fewer home owners amongst younger demographics

Figures from the latest English Housing Survey by the Ministry of Housing, Communities and Local Government (MHCLG), showed around 65% of homes were privately owned last year. Of those though, there was a significant drop in ownership between those aged 25 to 34 and 35 to 44, compared to two decades ago.

Buyers have more homes to choose from, interest rates are set to fall, and sellers will have to be more realistic regards pricing.

At least that’s the findings of the latest Rightmove report which reveals there are 11% more properties coming to market than at the same time last year. In fact, the number of properties listed for sale in estate agencies is the highest it’s been for more than a decade. The figures refer to January 2025.

Another plus for buyers is that, at £366,189, the average property value is now around 9% less than it was in May last year (when it was a record-breaking £375,131). Rightmove anticipates house prices will rise by 4% this year. 

Hopes that mortgage interest rates may reduce throughout the year were boosted by a fall in inflation to 2.5% in November. Interest rates for a typical two-year fixed rate deal is currently sitting around 4.97%. For five-year deals it’s roughly 4.75%.

A spokesperson for Rightmove commented: “We’ve also seen a strong start to the year in new seller asking prices, though given the higher-than-anticipated seller competition, we would expect this to slow down over the next few months.”

Nationwide report gives glimmer of hope for first-time buyers

Meanwhile, a new report by Nationwide shows that property has become more affordable. Based on last year, the data found that a first-time buyer with a 20% deposit needs to typically allocate 36% of their take-home pay to the mortgage. Although the percentage allocation fell last year, it’s still higher than the traditional 30%.

An increase in the cost of living, added to a rise in the cost of renting makes it increasingly difficult for first-time buyers to save for a deposit – to the extent nearly half (40%) reveal they received financial help from family and friends. Around 54% of property transactions carried out last year were for first-time buyers.

But Yopa’s CEO Verona Frankish said only an increase in construction will really make the difference to affordability – for all sectors of society.

“We need to see the government deliver on its promises of building more homes if any meaningful progress is to be made with respect to addressing housing affordability across the nation,” she concluded.

The average property in the UK may cost £269,426 but that’s still lower than the peak of frenzied post-lockdown buying two years ago.

Then (August 2022) the figure for the typical UK home was £273,751. This is according to the last Nationwide House Index for 2024. Despite this, the December figure for 2024 is 4.7% higher than at the start of the year. 

North-south divide continues unabated

The price increase indicates a clear north sound divide in England. Properties in the north of the country increased by 4.9% while in the south the figure was lower, at a more modest 2.2%.

Property analysts predict mortgage interest rates will fall this year – but not by much. And there’s no hard and fast rule as to when this will happen. The expectation though is enough to encourage buyers, with the first few months expected to be the busiest. That’s because the recent increased Stamp Duty allowances for first time buyers of £425,000 in England and Wales, and for those purchasing homes under the £250,000 threshold end on April 1. Last year first-time buyers made up 31% of all property sales.

Analysts predict 3% rise in property prices in 2025

Property agents Hamptons predict a 3% rise in house prices in 2025 and 3.5% the following year. Both they and property portal Rightmove believe this year will prove to be a buyers’ market for UK property. The latter predicts a rise in property figures for the London market of 4% over the next 12 months. They attribute much of this to major companies bringing employees back into the office rather than encouraging working from home.

Boxing Day property enquiries 20% ‘up’ on last year

Meanwhile the number of properties agents have on their books to sell is higher than any time within the past decade. In addition, Rightmove enquiries were 20% higher on Boxing Day 2024 than on the same day in 2023.

Landlords brace themselves for new regulations

The Renters’ Rights Bill is expected to be introduced in spring this year. One of the main concessions is that landlords will have to use a Section 8 notice to recover their property from bad or poor-paying tenants. It’s an area which is sure to prove newsworthy over the next 12 months. Watch this space…

Property prices have risen 4.8% over the past 12 months. 

That’s according to the latest figures from the Halifax House Price Index, published today. The news brings the price of the average property in the UK to £298,083.

Biggest November jump for two years

The annual jump is the biggest since November 2022. Price growth is highest in Northern Ireland, at 6.8%. But the North West of England isn’t far behind, with growth of 5.9%. The rise in Wales was 4.1%. In Scotland, the picture for home owners wasn’t quite as rosy, with an increase in property prices of just 2.8% year-on-year. London increases were higher than north of the border. Property in the capital was, in fact, up 3.5%, bringing the cost of a typical home there to £545,439.

Head of Mortgages at the high street lender is Amanda Bryden. She said the rise in UK property prices was the fifth in a row. The monthly jump between October and November was 1.3%. 

Ms Bryden added: “We are seeing improving levels of demand for mortgages. An easing in mortgage rates boosts buyer confidence.”

She did add though that the current economic situation exacerbated affordability difficulties for many would-be house buyers.

Propertymark CE Nathan Emerson insisted that with mortgage interest rates falling buyers are once again warming up to market conditions. 

Analysts urge caution as cost of living continues to impact

Other analysts don’t necessarily share Emerson’s confidence though. 

Karen Noye of Quilter admitted falling mortgage rates and general market stability had led to a ‘rebound in buyer activity.

But she was also conscious that rising cost of living was continuing to have an impact on buyers’ finances. 

“For the housing market to maintain momentum, a balance will need to be struck between supporting demand and addressing affordability constraints,” she added. “That’s particularly the case because higher interest rates are likely to remain a feature of the market for some time.”

Landlords looking to sell one-bedroom properties shouldn’t have too much difficulty over the coming months. 

That’s because, stamp duty thresholds and the ‘nil rate’ for first-time buyers, will revert to normal in April next year. And that means would-be first-time buyers will be rushing to buy and complete before the deadline looms. House price completions are currently taking around 152 days, according to the Rightmove property portal.

At the moment, buyers who purchase a property below £250,000 pay no stamp duty ie ‘nil rate.’ This cut-off point is likely to fall to £125,000 next year. By the same token, the threshold of £425,000 for first-time buyers could revert to £300,000. That means anyone purchasing a property at the UK average rate of £370,759 will have to pay an additional £3,538 in Stamp Duty Land Tax.

Rightmove’s Tim Bannister said that were the first-time buyer threshold of £425,000 to fall to £300,000 then only 37 per cent of properties would be stamp duty-free compared to 58 per cent today.

“This will particularly affect buyers in regions with higher property prices, such as London and the South East,” he added.

What buyers want in a property

Meanwhile, if you’re looking to sell your one-bedroom property then you’ll have a better chance of doing so if it has a breakfast bar or kitchen island and a good EPCA rating. 

Estate agents Yopa found that properties with at least one of these three attributes, sold quicker than others of the same size. 

The breakfast bar was deemed the most desirable feature (13.6 per cent of Yopa listings had one). Kitchen islands may not be possible in a smaller one-bed property, but it’s something that 12.6 per cent of all homes on the list offered. The same percentage of properties listed had a good EPC rating (of ‘C’ or above). 

Other desirables that home buyers in general are looking for include a freestanding bath, wooden beams, high ceilings throughout and a walk-in clothes closet.