A property expert has described what 2025 has in store, suggesting that one thing means buyers should be optimistic.
Daniel Chard is a partner at national conveyancing solicitors Bird & Co.
He has forecasted that that interest and mortgage rates will continue their downward trajectory into 2025, building on the trend established in 2024.
Specifically, he anticipates that the Bank of England (BoE) will further reduce its base interest rate, prompting mortgage lenders to follow suit by lowering their mortgage rates.
Concequently, an increased number of UK residents may opt for buying rather than renting, the expert adds.
Mr Chard said: “Potential house buyers can be encouraged by the fact that, as demonstrated in 2024, the Bank of England has continued to adjust interest rates strategically to support economic growth amidst global challenges.
“This year’s reduction in the base interest rate has already led to lower mortgage rates from lenders.
“Looking ahead, there is reason to be optimistic that interest and mortgage rates will continue their downward trajectory in 2025, following the trend set in 2024”.
Bird & Co adds that estimates indicate that Donald Trump’s proposed import tariffs could cost the UK billions, a prospect that is likely to weigh on the Bank of England’s policy decisions regarding interest rates.
The company also said in its look ahead to the new year: “We anticipate that, after stabilising in 2024, house prices may see a modest recovery in 2025.
“Our reasoning for this lies in the fact that lower and stable mortgage rates in 2025 might encourage more people to buy homes, pushing up prices slightly. However, affordability concerns will limit steep increases.
“The change in house prices will likely vary depending on location. The price increase will be more significant in rural areas, where demand is growing as more people move away from big cities.
“In contrast, property prices in urban areas may grow more slowly, as remote and hybrid work trends are reducing the need for people to live in those locations.”
Housing demand will also grow in 2025, Bird & Co predicts.
