Following the release of Halifax’s latest HPI data that showed that house prices increased by 0.7% in January, property professionals have shared their thoughts.
This increase pushed the average property price to a new record high of £299,138. However, annual growth slowed to 3%, the slowest rate since last July.
Amanda Bryden, head of mortgages at Halifax, said: “The UK housing market started the year on a positive note, with average prices rising by 0.7% in January, more than recovering the slight dip of 0.2% in December.
“Affordability is still a challenge for many would-be buyers, but the market’s resilience is noteworthy. There’s strong demand for new mortgages and growth in lending. With a stamp duty increase looming, some of this demand may have come from first-time buyers eager to complete transactions before the end of March.
“Despite geopolitical uncertainties, and waning consumer confidence, other key indicators look fairly positive for the housing market. The Bank of England has made its first base rate cut of the year, and there are probably more to come. Household earnings are expected to continue outpacing inflation – albeit that gap may narrow – easing some of the financial pressure still being felt from the cost-of-living squeeze.
“As things stand, mortgage rates are likely to hover between 4% and 5% in 2025, influenced by both global financial markets and domestic monetary policy. Over the past year, buyers have been getting used to this new normal, understanding that rates are unlikely to return to the historical lows of 1%.
“But the fundamental issue in the housing market remains the lack of supply. This long-term trend, coupled with a gradual improvement in affordability, should support further modest house price growth this year.”
Industry reaction:
David Johnson, managing director of INHOUS, said: “January’s property market was driven by two buyer demographics in particular. First-time buyers rushing to beat the looming changes to Stamp Duty thresholds and, on the other spectrum of the market, high-net-worth-individuals and property investors who revaluated the UK property market following Rachel Reeve’s plans to soften her previously announced non-dom tax changes. The heightened demand has contributed to more competitive market conditions for house hunters and the majority of properties holding their value, however, buyers should not shy away from entering price negotiations.”
Nathan Emerson, CEO of Propertymark commented: “As we embed ourselves into 2025, confidence is being echoed within the housing market, as house prices and mortgage lending remain buoyant.
“With the Bank of England announcing that interest rates are tracking downward, mortgage rates and financial pressures are now likely to continue to slowly improve in the imminent future for those looking to make their home move.”
Amy Reynolds, head of sales at Antony Roberts, said: “January was busier than normal, with a lot of market appraisals, which bodes well for a busy spring market.
“Increased activity from first-time buyers has helped, with more sales agreed in chains where someone is keen to take advantage of the stamp duty concession before it ends in March. The benefit to the first-time buyer is instant as it is real cash in their pocket, allowing someone to buy who might not have been able to, and the government perhaps needs to consider further stimulus for the market in its Spring statement.
“While all this suggests growing confidence, it’s too soon to say for certain how the market will unfold.”
Tom Bill, head of UK residential research at Knight Frank, commented: “Supply has risen more than demand in 2025, which should keep downwards pressure on prices in the short-term. Underpinned by a stamp duty rise in April, there have been tentative signs of stability in recent weeks, especially among needs-driven buyers in equity-rich markets where the impact of higher mortgage rates has been felt less acutely. How long that lasts depends on the bigger economic picture, including whether the UK gets caught in the crossfire of a trade war between the US and EU, how stubborn inflation proves to be and the impact of the Chancellor’s fast-disappearing financial headroom.”
Iain McKenzie, CEO of The Guild of Property Professionals, remarked: “The increase of activity towards the end of 2024 spilled over into 2025, with buyers eager to get their transactions over the line before the Stamp Duty changes in April. This has underpinned house prices and kept them edging upwards.
“Amidst conflicting news reports, the latest forecasts from HM Treasury provide a modest improvement for both the economy and the housing market this year. With an improved economic backdrop, the stage is set for steady market activity and moderate price growth throughout 2025.
“While inflation remains above its target, it is significantly better than the high rates seen in 2023 and 2024, and the Bank of England is expected to cautiously continue on its cycle of lowering the base rate throughout the year – as evidenced by the rate cut yesterday, the first of 2025.
“Yesterday’s decision should further improve affordability, widening the buyer pool and sustaining price growth to some degree. However, realistic pricing remains key, as many properties are still selling below asking price. While market conditions are strengthening, sellers should remain mindful of pricing strategies to secure deals in this evolving landscape.”
Guy Gittins, CEO of Foxtons, said: “The UK property market has certainly picked up where it left off last year, as the increasing momentum seen across the sales market throughout 2024 has continued to flow into the new year, further cultivating the rate of house price growth seen across the market and pushing the average house price to a record high.
“This has been driven by a degree of added urgency from first-time buyers keen to complete ahead of April’s stamp duty deadline, as well as a greater degree of acceptance from homebuyers of the adjustment to interest rates over time.
“Market activity remains robust and it’s clear that the nation’s buyers and sellers are hitting the ground running this year. In fact, we’ve seen buyer enquiries and viewings numbers remaining consistent with the latter stages of last year.
“All signs currently point to a prosperous year ahead with respect to property values and those considering a sale in 2025 should be looking to list their home on the market sooner, rather than later.”
Jeremy Leaf, north London estate agent, remarked: “On the ground, recent price resilience has been just as much to do with higher demand as much as insufficient and appropriate stock in more popular areas.
“We are finding many of those sellers who don’t have to move are not accepting realistic offers, though hopefully yesterday’s base rate cut will raise confidence and get more people moving. However, continuing worries about the economy and particularly inflation, as well as the pace of further rate reductions, is already preventing prices from steaming ahead faster.”
Verona Frankish, CEO of Yopa, stated: “A new year and a new record high for UK house prices, as the market shook off the seasonal slump seen in December to register positive growth both on a monthly and annual basis.
“This demonstrates that the growing momentum seen over the course of last year has remained, with homebuyers hitting the ground running in 2025.
“Whilst the current stamp duty deadline is certainly a factor in this positive start to the year, we expect market health to continue to improve long beyond 1st April, with market sentiment already receiving a welcome boost in the form of an interest rate reduction yesterday.”
Marc von Grundherr, director of Benham and Reeves, added: “The property market has bounced back following a brief pause for breath over the Christmas period and we’ve already seen an incredibly busy start to the year, with more buyers entering the market and a surge in stock levels as the nation’s sellers look to capitalise on this increase in market activity.
“We’ve also seen lenders move to reduce mortgage rates in anticipation of yesterday’s interest rate reduction and, whilst affordability remains an obstacle, we expect market activity to only strengthen as buyers benefit from lower borrowing costs.”