UK Property Market Shows Strong Growth with 2% Price Increase

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Property Market Momentum: UK Sees 2% Price Rise

The property market momentum in the UK continues in 2025, with rising prices and increased buyer confidence nationwide. Both sellers and buyers are actively participating in the market, and one region, in particular, is drawing attention for its rapid growth. The latest Zoopla House Price Index reveals a positive outlook for the property sector. House prices have risen by 2% year-on-year, showing growth and stability. Additionally, sales volumes have increased by 12%, the fastest growth rate observed in two years, further indicating the health of the market.

This upturn in property demand has been accompanied by a noticeable 13% rise in buyer interest, signifying a jump in appetite for UK real estate. The availability of homes on the market is improving. There has been a 10% increase in properties for sale compared to last year. In January 2025, estate agent branches had an average of 31 properties available. This marked the strongest start to the year in seven years.

Positive Market Sentiment: Property Market Momentum

Despite concerns surrounding potential changes to stamp duty and the slower-than-expected movement in the mortgage market, buyer sentiment remains resilient. Zoopla’s consumer tracker has demonstrated that more renters and homeowners are planning to buy or move in the next two years compared to the previous year. The latest data suggests that 17% of homeowners are considering relocating in the near future, up from 15% in 2024. Furthermore, 22% of renters are looking to purchase property soon, up from 18% in the previous year. The growing confidence is driven by a belief that the UK property market continues to offer a stable and profitable investment.

Interestingly, the number of homeowners not planning to move but intending to monitor the market has also risen, from 21% to 25%. This signals a cautious optimism, with many potential buyers waiting for the right moment to make their move.

The North West: The Market Leader in Growth

One of the most notable trends emerging from the current property climate is the ongoing strength of the North West of England. This region continues to outperform others in terms of house price growth, with an annual increase of 3.2% according to Zoopla’s data. The North West has consistently seen higher house price growth than many other parts of England. Experts predict this trend will likely continue for the foreseeable future.

Wages have been rising at a faster pace than house prices in many areas, which is helping to enhance affordability for many buyers. Zoopla’s report notes that earnings growth has been around 5% annually. This is strengthening purchasing power in regions with affordable prices. This improvement in wage growth is helping the property market maintain momentum, particularly in more budget-friendly areas.

However, affordability remains a key factor in the current market environment. Higher mortgage rates and the rising cost of living are slowing growth in expensive regions. As a result, buyers are turning to more affordable options. This shift is driving further interest in areas like the North West, where prices remain more accessible.

The Zoopla report highlights Wigan as one of the standout performers in the North West, with property prices rising by 5.6%. Other areas in the region, such as Liverpool and Manchester, have also seen strong growth in house prices. The outlook for the North West is positive. Forecasts suggest the region will continue to lead in property value increases.

Slower Growth in the South: Challenges for High-End Markets

While the North West and other more affordable regions are enjoying impressive growth, the situation is somewhat different in southern parts of England. London, the South East, and parts of the South West are seeing lower house price inflation. Some regions are experiencing price increases of less than 1.5%.

Zoopla’s data reveals that London in particular has witnessed a slowdown in house price growth. However, recent trends indicate that the market may be showing signs of revival, particularly among first-time buyers. The increased demand from first-time buyers in London and the South East could signal a market shift. This may lead to near-term price inflation in these traditionally higher-priced areas.

The current economic climate is a significant factor in these regional variations. Areas with higher property prices, especially in the south, are facing challenges due to elevated mortgage rates. Additionally, the higher cost of living is affecting these regions. As a result, affordability is becoming a major concern for many potential buyers, which is stalling growth in these markets.

Anticipated Surge Ahead of Stamp Duty Changes

Many property experts predict that the UK property market will continue to accelerate. This is especially true as we approach the upcoming stamp duty changes in April 2025. With the government expected to introduce new stamp duty thresholds, many buyers are rushing to complete their transactions before the changes come into effect. This surge in demand could push house prices higher in the short term. Buyers are eager to take advantage of the existing stamp duty structure.

However, Zoopla notes that the new stamp duty changes are not expected to have a major impact on the market overall. Buyers may experience a temporary spike in activity as they rush to close deals before the deadline. However, the property market fundamentals remain strong, with supply still lagging behind demand in many regions.

The ongoing imbalance between supply and demand in the housing market continues to provide a solid foundation for price growth. As more people look to move or invest in property, the demand for housing is expected to remain high, which in turn will continue to push property prices upwards.

Expert Views on the Market’s Outlook: Property Market Momentum

Toby Leek, President of NAEA Propertymark, commented on the market’s state. With higher average house prices and more buyers, now is a great time to sell. Propertymark member agents reported that the number of new buyers registered per branch has on average increased year on year by 44%.”

Leek further added that the upcoming stamp duty changes are having the desired effect, creating a sense of urgency among buyers. “The Stamp Duty changes in England and Northern Ireland, starting in April, are creating high activity. Many people want to save thousands on their next home move,” he said.

Malcolm Prescott, managing director of Webbers Estate Agents, echoed this sentiment, highlighting the importance of confidence in driving the UK property market. “Fundamentally the UK property market thrives on confidence and positive sentiment. Although negative press has persisted, customers are now embracing property. Prices are expected to rise slightly, and mortgage rates have stabilised affordability.”

Conclusion: A Stable and Growing Property Market

Overall, the UK property market is showing resilience and positive momentum in 2025, with price growth, increased buyer demand, and a stronger economic outlook. The North West continues to lead in price increases. Other regions are seeing varying growth levels based on affordability and market conditions.

As we approach the expected stamp duty changes in April, the property market is likely to stay active. Many buyers are eager to secure deals before the new thresholds take effect. The UK property market remains strong due to an imbalance between supply and demand and a growing economy. Therefore, it will continue to be a solid investment for the foreseeable future.

Buyer confidence is rising, and moderate price growth is expected. Therefore, it could be an ideal time to buy or sell property in the UK, whether you’re a first-time buyer, investor, or homeowner.

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