UK House Prices Surge £6,000 in a Month – Rightmove Predicts 2025 Will Still Favor Buyers
House asking prices have risen sharply in the first month of 2025, with an average increase of £5,992 (1.7%) from December. This marks the largest “New Year bounce” in the housing market since 2020, bringing the typical asking price of a property to £366,189, according to Rightmove. While this is a notable jump, prices are still nearly £9,000 lower than the record highs seen in May 2024, showing that buyers are still feeling the impact of affordability challenges.
The strong start to 2025 may suggest a continued upward trend, but Rightmove points out that price increases could slow down as the year progresses. The number of new properties entering the market has surged by 11% compared to the same period last year, offering buyers more choice. As competition increases, sellers may need to adjust their asking prices and make their homes stand out in a crowded market.
Sellers Will Need to Adjust in a Competitive Market
With a larger selection of homes available, sellers will need to be strategic with their pricing and home presentation to attract buyers. Rightmove’s Colleen Babcock explains that while it’s encouraging to see more homes on the market, sellers may struggle to maintain higher asking prices if demand doesn’t meet expectations. To stand out, sellers will need to consider offering competitive pricing or highlighting standout features and impeccable presentation.
Mortgage Rates Impacting Buying Power
One of the major factors influencing the housing market is the continued high cost of borrowing. Mortgage rates remain elevated, with many buyers securing fixed rates between 4.5% and 5% for the foreseeable future. For example, a £300,000 mortgage over 25 years at a 4.75% rate would result in monthly payments of £1,748. With mortgage rates expected to stay relatively high, buyers’ borrowing power is squeezed, limiting what they can afford and making the market more challenging for many.
Mortgage experts predict that unless there is a significant shift in interest rates, buyers will continue to face affordability constraints throughout 2025. The uncertainty surrounding future interest rate cuts by the Bank of England is adding to the caution many buyers are showing when considering home purchases.
What Buyers Should Expect in 2025
Despite these challenges, demand for property remains strong. Buyers are still eager to move, but the desire for stability and long-term security in the housing market is key. Economic uncertainties and fluctuating mortgage rates have caused some buyers to pause their decisions, but the underlying interest in moving remains high.
For sellers, the increase in market competition means that setting a realistic asking price is more important than ever. Homes that are priced too high may struggle to sell as buyers have more options and tighter budgets. A well-priced, well-presented home will stand out and attract serious offers.
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