Market growth expected later this year
Although reports indicate a December rise in property transactions due to buyers rushing to finalise purchases before upcoming Stamp Duty changes, the RICS UK Residential Property Survey for January 2025 reflected a broadly flat picture for demand and sales in the housing market.
The survey found that new buyer enquiries showed no net change, with a balance of 0%, indicating steady interest in home purchases. Agreed sales saw a marginal increase, recording a net balance of +3%.
Despite the slow start to the year, market sentiment appears more optimistic for the months ahead. The three-month sales outlook improved to a net balance of +10%, while expectations for the next 12 months were even stronger at +30%.
Official data from HM Revenue & Customs (HMRC) reported a rise in UK property transactions in December 2024, attributed to buyers accelerating purchases before upcoming stamp duty adjustments. Similarly, Santander noted a 130% year-on-year surge in mortgage applications in the fourth quarter of 2024, as buyers sought to secure deals before the new stamp duty thresholds take effect in April.
According to the RICS survey, house prices continued their upward trend, with 22% more survey respondents reporting price increases than those reporting declines. Northern Ireland and the North West of England experienced the most significant growth, whereas Yorkshire and the Humber and the South East saw more modest gains. Over the next year, 55% of survey participants expect prices to continue rising.
In the rental sector, demand remained nearly flat, with a net balance of +2%. Meanwhile, the supply of rental properties continued to shrink, as landlord instructions declined by -19%. With demand and supply moving in opposite directions, rental prices are expected to climb further, with a net balance of +23% anticipating increases over the next three months.
“The latest survey feedback indicates that growth in buyer demand lost a bit of momentum through the early part of the year, with this flatter picture likely linked to the turbulence seen across money markets in the first half of January,” said Tarrant Parsons (pictured), RICS head of market analytics.
“Nevertheless, moving forward, respondents continue to envisage a slightly positive near-term outlook for sales activity. This should be further supported by the unwinding of some of the pressures around mortgage interest rates over the past couple of weeks.”
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