Market Watch - January 2025

The UK property market in January 2025 is navigating a period of cautious optimism amid shifting economic conditions. House prices have shown moderate fluctuations, influenced by rising mortgage rates, which have tempered demand, particularly among first-time buyers. UK inflation is still above the BoE target of 2% meaning the central bank interest rate is unlikely to drop again soon.

However, ongoing supply constraints, such as limited new builds and a slow pace of planning approvals, continue to provide upward pressure on prices in high-demand areas. Regional disparities remain prominent, with London and the South East seeing price stabilization, while more affordable regions in the North experience modest growth.

External factors, such as inflationary pressures and government policies like stamp duty adjustments or incentives for energy-efficient renovations, are also shaping market trends; particularly in the short term up to April. As confidence rebuilds following economic uncertainties, buyers and investors are adopting a more strategic, long-term approach to property acquisitions.