Jackson-Stops’ 2025 Property Market Predictions: Pent up demand in 2024 provides basis for a busier 2025

• National estate agent Jackson-Stops predicts house prices will remain firm, with some local markets expecting to see prices rise by up to 4%
• Downsizers and young families are the most active buyer groups, reflecting a market that has been driven by lifestyle changes and moves based on necessity
• Good transport links, home working spaces and properties in Ofsted rated school catchment areas more important than ever before
• Long transaction times and extended chains are causing challenges
• Greater certainty after the General Election created a ‘Starmer Surge’ which will carry through to 2025

National outlook
National estate agent Jackson-Stops expects UK mainstream house prices will remain on a par with 2024. More than a third (38%) of Jackson-Stops agents predict property prices will hold in 2025, while a further third (31%) expect an increase of between +2 and +4% , indicating the nuances of local markets.

In the short term, agents across the network expect that Q1 will be particularly active as buyers look to complete before the end of current Stamp Duty incentives and act upon pent up demand that has been building throughout much of 2024 as the market awaited political stability.

When asked to describe their expectations for the property market in 2025, the three most common words Jackson-Stops agents used were “challenging” (75%), “balanced” (42%) and “competitive” (33%), suggesting that while the stability from 2024 is predicted to carry through to 2025, economic headwinds and policy changes will have an impact.

Despite an expected bump to sales, the recent Autumn Budget and proposed changes to housing policy have the potential for a somewhat dampening impact on the market. For example, increased stamp duty on second homes and Buy-to-Let properties from 3% to 5% could weigh on buyers’ decisions. In most cases the increase will be a cost that committed investors will absorb, but in the short term this section of the market may cool until the housing landscape becomes normalised to the additional cost.

Nick Leeming, Chairman of Jackson-Stops, comments: "As we look ahead to 2025, the UK property market appears poised for a period of stability and soft growth. With the political landscape looking more settled and the shockwaves from the October budget subsiding, we have every reason to expect a more balanced market in 2025. This newfound equilibrium will be beneficial for both buyers and sellers, fostering an environment where transactions can proceed with greater confidence and predictability. We anticipate that this stability will encourage more people to enter the market, whether they are first-time buyers or those looking to move up the property ladder.

“In the prime market, we expect to see significant activity, benefiting from increased buyer confidence and a more stable economic outlook which will help at all stages of the chain. Moreover, with mortgage rates expected to stabilise and potentially decrease, we foresee a resurgence from committed investors seeking secure and high-return assets.

“Next year, we are hopeful that government will look to prioritise housing for older demographics and ideally incentivise downsizers – this would bring more fluidity to the market at every level. Overall, the outlook for 2025 is quietly optimistic with demand moving in the right direction following a cautious 2024.”

Market Fundamentals of 2025
Upsizing families (54%) and downsizing retirees (39%) continue to be the biggest drivers of property sales across the Jackson-Stops network throughout next year. This demand reflects a market where property decisions are being made based on necessity. Meanwhile the stamp duty changes announced in the Budget will create muted activity from Buy to Let investors.

Yet, lengthy transaction times will continue to be a challenge for buyers and sellers with the time taken between sale agreement and exchange of contracts now averaging more than three months in some markets. An overwhelming nine in 10 (92%) Jackson-Stops agents believe property transactions are taking longer on average than a year ago. This has been in part because of the time taken to process mortgages currently, as well as the cross-county variations in acquiring searches and solicitors and licenced conveyancers sourcing answers to queries ahead of exchange of contracts. This is reflective of the skills gap the sector is facing and the desperate need for prop-tech to streamline archaic processes.

Country house market
The most popular requests from buyers in 2024 and that are set to continue into 2025, are home offices and dedicated working from home spaces (67%), properties with good transport connections (58%), followed by properties near an Ofsted ‘outstanding’ or ‘good’ rated schools.

Nick Ferrier, Director of Jackson-Stops Midhurst, comments: “The introduction of VAT on private school fees is poised to send a ripple through the housing market, particularly for those navigating the mid to high-end segments. There will be buyers and sellers who are in the process of either tightening the purse strings, lowering their home aspirations or releasing equity to accommodate the rise in fees. This should prompt a rise in activity.”

Alastair Hancock, Director of Jackson-Stops Kent and East Sussex, comments: “As we look ahead to 2025, the property market in Kent and East Sussex presents a mixed yet cautiously optimistic picture.

“One significant factor driving buyer interest is the quality of local schools. Properties within desirable school catchment areas, such co-educational state funded boarding and day grammar schools, like Cranbrook School, are highly sought after. This trend is expected to continue, leading to greater competition among family buyers.

“The market up to £1 million remains relatively stable, with consistent demand and steady prices. However, the £1-£2m segment is more variable and properties over £2m are experiencing a fluctuating market. Sellers in the higher price brackets may need to be more flexible in negotiations to guarantee successful transactions.

“In the current market there is a need for realistic pricing and patience from sellers. Buyers are negotiating harder, reflecting a market where value is keenly sought. The number of cash buyers has decreased, with most buyers now involved in chains, prolonging transaction times.

“The early part of 2025 is expected to see a resurgence in both buyers and sellers entering the market. The quieter second half of 2024 suggests pent-up demand, which could lead to a more vibrant market. While interest rates and economic conditions will play a crucial role, the fundamental appeal of Kent and East Sussex, with their excellent schools and quality of life, remains strong.”

Chris Jarrett, Director of Jackson-Stops Cheltenham, comments: “Despite broader economic uncertainties, local housing dynamics have remained remarkably resilient. The end of the stamp duty incentives has sparked a flurry of activity, particularly at the higher-end, suggesting a warming market for the year ahead.

“Cheltenham continues to attract families, buyers are often drawn here to upsize within the local area or relocating from the Southeast, attracted by excellent schooling options and charming community feel. The demand is balanced, with keen interest in both detached and terraced properties, especially the beautiful Georgian terraces that define the area. Sellers are motivated by both necessity and opportunity, with confidence playing a crucial role.

“The first quarter of 2025 is set to be particularly strong, buoyed by the residual effects of the stamp duty incentive and the traditional spring market enquiries boost post-Gold Cup. This period typically sees increased activity as families look to settle before the new school year. The potential for a reduction in base rates could further invigorate the market, fostering a stable and confident economic environment.

“House prices in Cheltenham are anticipated to see modest yet steady growth, estimated between 2-4%. While the days of dramatic price leaps may be behind us, the market is expected to grow steadily, driven by inflation and consistent demand. The intrinsic appeal of Cheltenham, with its vibrant festivals, top-notch schools and high quality of life, remains a powerful draw.”

Marcus Browne, Director of Jackson-Stops Taunton, comments: “The Somerset property market is poised for a positive year. House prices are expected to stabilise now we have greater long-term certainty, providing a solid foundation for both buyers and sellers. This follows a year of adjustment, where aligning buyer and seller expectations was key; an area where an experienced team is invaluable.

“We deal with some second home buyers, but the market we tend to specialise in is primarily being driven by families who are seeking good schools, excellent transport links and the charm of the countryside on their doorstep. Despite being in the West Country, many buyers maintain connections to London for work, making accessibility an important factor in the decision.

“A notable trend has been the preference for move-in-ready homes. Rising costs of materials and labour have made major renovation projects less attractive to buyers. Instead, properties that require only cosmetic updates, such as painting or new carpets, are in higher demand. We expect this trend to continue into 2025.

“Looking ahead, the hope is that the demand from discretionary buyers who have been waiting on the sidelines will start to materialise significantly in the Spring and Summer, with a promising array of properties already on our radar to launch next year.

“For the Somerset market, there are several positive indicators for 2025 already. Renewed buyer confidence coupled with a strong supply of desirable properties, suggests a balanced and active market. Both buyers and sellers can look forward to a year of steady opportunities, with the potential for increased activity.”

Earlier this year Jackson-Stops conducted a survey of 3,000 of its customers exploring the changing property preferences which revealed a ‘freshen-upper’ (49%) is the most desirable property type for prospective buyers, far outpacing demand for a turnkey (22%) or fixer-upper (16%).* Almost half (47%) of potential movers who choose a ‘freshen-upper’ do so as they want to add their own finishing touches, picking a ‘freshen-upper’ to add personality to their new home and only 10% of prospective movers feel they have the skills to renovate a property.

Country lettings market
Across Jackson-Stops’ network rents are predicted to rise by between 2 and 3% in the next 12 months, but stubborn inflation coupled with affordability constraints will hold the market back from rising further. The prospect of accidental and smaller landlords leaving the sector due to changes to rental policies could also see greater sales supply enter the market, both for first-time buyers and committed investors.

Will Jordan, Director - Lettings at Jackson-Stops Alderley Edge, comments: “2025 presents several opportunities for the lettings market in Alderley Edge and the sector more broadly.

“The introduction of the Renters' Rights Bill, which aims to enhance tenant protections, coupled with proposed changes to Energy Performance Certificate (EPC) requirements will be important legislative changes for landlords and investors to navigate. While some uncertainty still remains on what these changes will mean in practice, there are opportunities for new and seasoned investors. The potential exit of smaller, accidental landlords from the market could create opportunities for professional landlords to acquire properties at favourable prices. These investors, equipped to navigate the new regulations, can benefit from long-term, stable rental income.

“Tenants will also benefit from enhanced protections and a more tenant-friendly environment, although affordability will remain a key concern. Rental prices are expected to increase moderately in Alderley Edge, with predictions of a 2-3% rise over the next 12 months. This increase is likely to be tempered by inflation and affordability constraints, preventing rents from rising too sharply.

“Demand for rental properties remains strong, driven by various factors such as life stage changes, relocations and the flexibility that renting can bring. This sustained demand will continue to support the lettings market.

“2025 will be a considerable year for the lettings market, with some of the biggest legislative changes in more than 30 years due to come into effect.”

London sales and lettings market
Harry Buchanan, Director of Jackson-Stops Pimlico & Westminster, comments: “The Pimlico and Westminster market is showing strong signs of resilience and growth as we head into 2025. In Q3 of 2024, we saw a remarkable increase in deals compared to last year, with more than half of these being cash purchases, indicating robust buyer confidence.

“Despite potential changes in capital gains tax, now is a great time for sellers to act, especially since the selling process can take longer than expected. The possibility of lower interest rates could attract even more buyers and the end of the stamp duty holiday for first-time buyers on March 31st is likely to boost transactions.

“On the lettings side, demand remains high with rents staying strong and long tenancy terms providing landlords with steady income. Those with HMO licenses for their three-bedroom properties are seeing particularly significant benefits.

“Overall, the market in Pimlico and Westminster is not just holding steady, it's poised for an exciting year ahead, full of opportunities for both buyers and sellers.”

New Homes market
Sarah Walsh, Head of New Homes at Jackson-Stops, comments: “As confidence returns, we expect demand to become more apparent and the market should become more buoyant by mid-2025. The government’s £25 million investment to deliver 3,000 energy-efficient new homes is an exciting development; this is exactly the type of stock our buyers are looking for and this will no doubt help soften the imbalance between supply and demand we’re currently seeing.

“Buyers are increasingly appreciating the thoughtful designs and modern features of new homes, which cater to a wide range of preferences from young professionals to downsizers.

“Key trends for 2025 include a strong desire for energy-efficient features like solar panels and heat pumps, as well as a continued interest in downsizing to reduce maintenance costs and free up capital. Proximity to transport links and homes with potential for extensions will also be significant factors for buyers.”