NAVIGATING THE PROPERTY MARKET IN 2025

Throughout 2024, the UK property market showed resilience and adaptability in the face of economic challenges. As we enter 2025, the market is poised for an eventful year.

With house prices projected to outpace inflation and mortgage rates predicted to fall, buyers, sellers, and investors face a mix of opportunities and challenges.

Drawing on the latest data, including insights from the Land Registry and the Centre for Economics and Business Research (CEBR), we reflect on the conveyancing trends of the past year and share our insights and practical advice for buyers, sellers, and investors in 2025.

A Look Back at 2024

The UK property market experienced a notable recovery in 2024, with house prices showing steady growth after a decline in 2023. According to Zoopla, UK house price inflation reached 1.5% by October 2024, marking a significant improvement from the previous year's contraction of -1.2%. This rebound was supported by factors such as lower mortgage rates, faster household income growth, and increased transaction volumes. Mortgage approvals in October 2024 surged by 42% year-on-year, reflecting renewed confidence among buyers.

The Government's Land Registry has also reported that house prices grew by 2.9% between September 2023 and September 2024. Looking ahead to 2025, most forecasters, including the Centre for Economics and Business Research (CEBR), anticipate an even stronger performance, projecting house price growth of 4.1% for the year.

While falling mortgage rates may reduce monthly repayments, higher property prices and a significant stamp duty overhaul will create hurdles, particularly for first-time buyers. Recent changes announced by Chancellor Rachel Reeves in the October Budget mean second-home buyers, landlords, and companies will face higher stamp duty rates, while the nil-rate band for first-time buyers has been lowered. This could temper house price growth slightly but will likely make it harder for first-time buyers to save the necessary deposits.

Conveyancers were particularly busy last year, as more transactions moved towards completion. The return of serious buyers, keen to lock in deals before higher stamp duty rates take effect in April 2025, also played a significant role. This urgency has added pressure to the conveyancing process, highlighting the importance of efficient legal support in property transactions.

Advice for Buyers in 2025

For buyers, preparation and speed will be essential in a competitive market.

Understand your budget and stick to it: With house prices rising, it's more important than ever to calculate not just purchase costs but also stamp duty and legal fees. Buyers in the £300,000 to £425,000 range will need to account for the new stamp duty threshold.

If you need to move, don’t rely on waiting for lower mortgage rates: Whilst lower rates will improve affordability, further reductions are not guaranteed. Any reductions will likely increase demand and could push lenders to tighten conditions so early action is advisable. Working with a mortgage broker can help you secure the best terms.

Choose a trusted conveyancer: An efficient legal team can expedite the transaction process, ensuring you avoid delays and lock in deals before changes in market conditions or taxes take effect.

Advice for Sellers in 2025

Sellers are well-positioned to benefit from rising prices, but success depends on meeting buyer expectations and with more properties on the market, buyers are in a strong position to both hold out for exactly what they want and to negotiate.

Emphasise ‘move-in’ aspects of your home:  High renovation costs mean buyers are looking for “turn-key” properties. Upgrades in energy efficiency and aesthetic appeal can justify higher asking prices.

Don’t scrimp on services - work with professionals: A good estate agent and experienced conveyancer can streamline your sale, helping navigate new tax implications and ensuring a smooth process. Sales are more likely to fall through if the transaction is held up.

Think about timing: Listing early in the year might help you attract buyers eager to complete transactions before the April stamp duty changes.

The Role of Conveyancers in 2025

The conveyancing sector will continue to evolve to meet the demands of a dynamic property market. Innovations in digital property transactions, such as electronic ID verification and online contract exchanges, are expected to reduce delays. However, buyers and sellers should remain vigilant, ensuring thorough due diligence is carried out to avoid pitfalls such as incomplete property searches or unclear boundaries.

With transaction volumes projected to grow by 5% in 2025, Stuart Forsdike, founding partner at PCS Legal, emphasises the need for patience and preparation. "The key to a successful transaction is clarity and communication," he says. "Buyers and sellers who approach the process methodically, with the right professional support, are best positioned to succeed."

The UK property market in 2025 offers plenty of potential for growth, but also demands careful planning. Buyers and sellers alike must stay informed and proactive. At PCS Legal, we’re committed to guiding you through these complexities, ensuring smooth and successful transactions.

For tailored advice and expert conveyancing services, contact PCS Legal.