The UK housing market is constantly evolving, and 2025 is shaping up to be another year of change. With house prices shifting, mortgage rates adjusting, and upcoming tax changes, many buyers and homeowners are wondering what their next move should be.
Here’s a look at the key trends shaping the market and what they could mean for anyone looking to buy, sell, or remortgage this year.
House prices continue to rise
House prices continued to climb in 2024, with Nationwide reporting a 4.7% annual increase. However, growth rates vary significantly across the UK:
- Northern England saw the largest price increases, rising 5.9% over the year.
- London and the South East experienced slower growth, with London prices increasing by just 2%.
Mortgage rates: some good news for buyers
After a period of rising rates, mortgage costs are starting to ease. The average five-year fixed mortgage rate has dropped significantly over the past year.
For those considering remortgaging, this could be a good opportunity to lock in a more favorable rate before further changes in the market.
If your fixed-term mortgage is ending soon, reviewing your options early can help secure a better deal and potentially lower monthly payments.
Stamp Duty changes: why buyers are rushing
One of the biggest talking points right now is Stamp Duty Land Tax (SDLT). From April 1st, 2025, the tax thresholds are changing, meaning many buyers will end up paying more if they purchase after this date.
This has triggered a rush to buy before the deadline, particularly among first-time buyers and those moving up the property ladder.
If you’re in the market now, it’s worth moving quickly—but don’t panic. At SMH Residential Mortgages, we can help you navigate this period and make sure you’re getting the right deal.
More properties on the market
One noticeable shift in 2025 is the increase in available properties. The number of homes coming to market is up 11% year-on-year, with flats making up a large portion of new listings.
However, new home construction is slowing, with building activity at its lowest level since 2020. While more homes are being listed for sale, long-term supply shortages could continue to push prices up in high-demand areas.
For buyers, competition remains strong—having mortgage approval in place before making an offer can improve chances of securing a property.
First-time buyer challenges
Buying your first home in 2025 isn’t easy—rising living costs, stamp duty changes, and stricter mortgage criteria have made affordability a real challenge. But there are still ways to get on the ladder:
- Government-backed mortgage schemes are helping buyers with smaller deposits.
- Shared ownership and Help to Buy alternatives are making homes more accessible.
- More lenders are offering flexible mortgage options tailored to first-time buyers.
If you’re struggling to figure out how to afford your first home, get in touch with SMH Residential Mortgages on 0330 107 1558 or email info@smh.group
As a mortgage is secured against your home, it may be repossessed if you do not keep up the mortgage repayments. This site is intended for UK residents only and the laws of England are applicable.
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