Nationwide: A look into the new year for house buyers in 2025

Christmas is coming and…

While the goose is looking disconsolately at the tape measure reading around its waist, the time has come for many companies to look back on the previous year… and to look forward at what the new year might bring.

To this end, the building society Nationwide has produced its annual House Price Review and Outlook for 2025 report.

There is an important point that Nationwide has identified when looking back over the past year: the activity in the housing market has proven to be incredibly resilient in the face of a number of external pressures and other issues and has not been as hindered by the affordability status as had originally been thought.

In addition, the rate of house price increases has shown a remarkable resurgence after falling into the doldrums - and negative pricing over several months of the available stock - during 2023, picking up to end with a healthy continuous price rise. In fact, Nationwide has stated that they are reasonably certain that house prices in 2025 will maintain their current rates of price rises of between 2% and 4% throughout the coming year.

Government policy decisions and announcements affecting the state of housing and the market have also had their impact, with government and Bank of England figures showing increased numbers of sales of property as buyers try to meet the imposed stamp duty deadline for the end of March 2025.

As Robert Gardner, Nationwide's Chief Economist, comments:

“Mortgage market activity and house prices proved surprisingly resilient in 2024 given the ongoing affordability challenges facing potential buyers. 

“At the start of the year, house prices remained high relative to average earnings, which meant the deposit hurdle remained high for prospective first-time buyers, a challenge that had been made worse by record rates of rental growth in recent years, which has hampered the ability of many in the private rented sector to save.

“Moreover, for many of those with sufficient savings for a deposit, meeting monthly payments was a stretch because borrowing costs remained well above those prevailing in the aftermath of the pandemic. 

“For example, a typical mortgage rate for someone with a 25 per cent deposit hovered around 4.5% for much of the year, three times the 1.5% prevailing in late 2021 before the Bank of England started to raise Bank Rate.

“As a result, it was encouraging that activity levels in the housing market increased over the course of 2024. 

“The number of mortgages approved for house purchase each month rose above pre-pandemic levels towards the end of the year. 

“Similarly, after starting the year registering small annual declines, the pace of house growth moved firmly into positive territory, approaching 4% in November.”

As for what is coming up in the new year, Gardner had these comments to make:

“Upcoming changes to stamp duty are likely to generate volatility, as buyers bring forward their purchases to avoid the additional tax. 

“This will lead to a jump in transactions in the first three months of 2025 (especially in March) and a corresponding period of weakness in the following three to six months, as occurred in the wake of previous stamp duty changes. 

“This will make it more difficult to discern the underlying strength of the market.

“But, providing the economy continues to recover steadily, as we expect, the underlying pace of housing market activity is likely to continue to strengthen gradually as affordability constraints ease through a combination of modestly lower interest rates and earnings outpacing house price growth, where the latter is likely to remain broadly in the 2-4% range in 2025.”

Whatever your plans for moving in the new year, you can be assured that appointing your conveyancing solicitor through Homeward Legal will be one of the best resolutions you can make.

Until then, merry Christmas and a happy and peaceful 2025.

Looking for a change of home in the new year? That's where you can rely on the experts at Homeward Legal to help you with a thorough job of the legal side of things. 

They will start work on your planned purchase as soon as you agree to the quotation and appoint them to represent you. 

Homeward Legal will also provide a quote that will not change - what you are quoted is what you pay for standard conveyancing process, which means you can effectively budget for your conveyancing needs.

There are some unforeseen items that might arise during the purchase and/or sale, which includes a specialist flood assessment report, but the solicitor discusses these and their cost as they come up. 

In addition, to protect the homebuyer further, Homeward Legal operates a ‘no completion, no fee' promise, which ensures that, should the purchase or sale not go through as planned to completion status, no payment is required.

Call  to get your conveyancing quote started, or to discuss your concerns with your plans to move.

Or you can get a quick quote, using Homeward Legal's easy-to-use quote generator.