Property prices are set to rise by 2.5% in 2025. 

That’s according to online property portal Zoopla. Their latest Housing report also predicted a 5% increase in the number of homes swapping hands in 2025. That equates to around 1.1 million properties – 10% more homes than were sold in 2023.

Property prices rose by 1.5% from October 2023 to the same period in 2024. The portal now assesses the average property in the UK at £263,300 – a jump of £3,900.

Changing demographic introducing more homes to market

The stamp duty changes in April next year, together with higher household income and reduced mortgage rates are believed to have stimulated the market in recent weeks. But an ageing population looking to downsize and the continuation of hybrid working is also making its mark, by introducing more second homes. Landlords have also been selling off rental properties at a greater rate than before thanks to various fiscal changes, including increased tax on second homes.

Zoopla’s exec direction Richard Donnell said areas benefitting from the rise in prices were more likely to be Scotland, Wales, the North and the Midlands. Southern England and London would prove too costly for many people, especially first-time buyers.

Areas which benefitted most from buyer demand

The Zoopla report also identified those areas where house prices had risen most over the past year. The North West and North East of England were top of the list, with property price rises of 2.9% and 2.6% respectively. Scotland was next with a jump of 2.3% in house prices (in Wales property increased 2.1%). Both the West Midlands and Yorkshire and the Humber saw a 2.1% rise in prices.

In London property valuations rose by 1.1%. The figure for the South West was 0.4%, which both the South East of England and East of England saw a minimal 0.3% rise in prices.

Increase in mortgage approvals

As expected, due to increased activity in the property market, more mortgages were approved last month – the largest amount for more than two years. The Bank of England signed of 68,303 in October. That’s a 3.3% increase on the previous month and the fifth consecutive month of growth.