The UK housing market is showing signs of recovery in 2025, showing increased buyer demand, more properties available for sale, and a rise in agreed transactions. According to Zoopla’s latest House Price Index, the market is recovering from the uncertainty of the past two years, presenting opportunities and challenges for landlords and property owners.
The Landlord Insurance team at Lansdown breaks down the key points highlighting what landlords and property managers need to know.
Buyer Demand on the Rise
Buyer demand has surged by 13% year-on-year, with a 10% increase in available homes and a 12% rise in sales agreements. This suggests greater market confidence and could lead to faster property transactions. For landlords considering expanding their portfolios, this increase in activity may indicate a good time to explore opportunities before prices rise further.
The Impact of Stamp Duty Changes
A key driver of this heightened activity is the upcoming change to stamp duty relief in April 2025. The current tax benefits for first-time buyers will be reduced, leading many to accelerate their purchases before the deadline. This has been particularly evident in the £300,000 to £625,000 price range, where first-time buyer demand has jumped by 33% in recent months.
For landlords, this means increased competition from buyers looking to secure properties before higher stamp duty costs come into effect. If you’re planning to buy or sell, understanding these shifts in demand will be crucial for making informed decisions.
Regional House Price Trends
While house price inflation remains varied across the UK, Northern Ireland has seen the highest growth at 7.7%, followed by the North West at 3.2%. In contrast, the East of England has experienced more modest growth at 1%. The UK’s average house price reached £267,700 in December 2024, marking a 2% year-on-year increase.
For property investors, keeping an eye on regional trends can help identify areas with strong growth potential and rental demand. A well-insured investment in the right location could bring solid returns in 2025 and beyond.
Housing Affordability and Mortgage Rates
Over the past two years, earnings have been rising faster than house prices, gradually improving affordability. With mortgage rates stabilising between 4-5%, the market outlook remains optimistic. However, landlords should remain cautious and assess their financing options carefully, as interest rate changes could still impact profitability.
About Lansdown
Lansdown Insurance Brokers are specialists in Landlord Insurance, Block of Flats Insurance and HMO Insurance. We are able to provide flexible policies to suit your requirements and provide advice on what cover is needed. For more information call the team on 01242 524498 or email enquiries@lansdowninsurance.com.
Lansdown is part of the Benefact Group, a charity-owned, international family of financial services companies that gives all available profits to charity and good causes.