What Will Happen To UK Houses Prices in 2025?

House prices rose nearly 5% in 2024—close to an all-time high—but why? And what’s next for 2025? 🏠📈

In this video, I’ll break down:
1️⃣ Why house prices increased in 2024.
2️⃣ Key factors that could shape the 2025 market.
3️⃣ Expert forecasts for the coming year.

Whether you’re a buyer, seller, or investor, this insight will help you navigate the UK property market in 2025.

💡 Ready to make informed property decisions? Visit www.britishhomeinvestors.co.uk.

💬 What do you think will happen to house prices in 2025? Share your thoughts in the comment

🔗 Additional Resources and Links:

🏡Want me to buy your house?►

Home Page

🔑Want me to sell your house? ►

Home Page

💰Need help with financing/mortgage?►
https://britishhomesellers.co.uk/referrals/mortgages/?src=bhswsref

⚖️ Need assistance with solicitors/conveyancer?►

Home Page

📱 My Socials:
📸 Instagram – https://www.instagram.com/williamgale/
🐦 Twitter – https://twitter.com/gale_william
👨‍💻 Linkedin – https://www.linkedin.com/in/william-gale-8a92b916/
👍 Facebook – https://www.facebook.com/willgale
🎵 TikTok – https://www.tiktok.com/@britishhomebuyers

👋 Who am I?
My name is William Gale, and I’m the founder and CEO of The British Home Group of Companies. Curious to learn more? Check them out above! I took the leap into entrepreneurship in 2012, quitting my job to start my first company and I haven’t looked back since. I hope you find my content valuable & if your interested in videos about Finance, Business & Entrepreneurship check out my personal YouTube Channel Below:

https://www.youtube.com/@TheWilliamGale

in 2024 we saw house prices rise to an almost alltime high but why why have house prices risen so much will house prices keep rising or fall in 2025 should we be worried in this video I’m going to walk you through the facts so that you can decide this for yourself and in case you don’t know me my name is and in case you don’t know me my name is Will gaale and I spent over 10 years building a UK wide home buying company British home buyers a nationwide estate agency British home Sellers and my own personal property portfolio so not only does that give me some Insider knowledge but also making sure I read the market correctly is essential for both mine and my client’s success I’ve broken this video down into three key sections one why have house prices increased in 2020 4 two what could affect house prices in 2025 and finally three what are the house price forecasts right now for 2025 so let’s get into it why have house prices increased so much in 20124 the Bank of England’s base rate fell twice in 2024 from 5.25% to 4.75% which definitely helped boost Market activity but just by how much while lower by base but just by how much while lower by base rates have some impact mortgage rate didn’t fall as significantly as we all hoped according to Nationwide the average 5year fixed mortgage rate dropped by only. 2% leaving affordability still strained for most buyers meanwhile house prices Rose by 4.7% so for context in December 2023 the average house price was 257,000 by December 2024 it risen to 269,000 so if you’d bought the average house a year ago a 75% loan to value 25e house a year ago a 75% loan to value 25e mortgage at 4.9% would have cost you just over £1,100 a month today with the higher price and slightly lower rate of 4.8% the monthly payment is 1,170 qu there there or thereabouts plus you’d need roughly an extra £3,000 as a deposit so despite the small drop in interest rates affordability has not improved for firsttime buyers lower rates really seem to benefit existing homeowners more by reducing our monthly repayments rather than helping new buyers enter the market aresh this brings me to the affordability Paradox interestingly while affordability seems worse in real terms the house price to earnings ratio has actually been improving this ratio divides the average house price by the average salary showing how many years worth of income it takes to buy a house after spiking during covid the ratio is slowly falling back to pre pandemic levels thanks to Rising wages but of course we all know buying property preco wasn’t exactly easy so the property Market getting easier still means the property Market is really hard for a lot of people in is really hard for a lot of people in reality barely takes the edge off I think but let’s talk about the real problem the supply demand disbalance before we dive into what could affect house prices in 2025 we need to address the elephant in the room The Chronic imbalance between supply and demand in the UK housing market this imbalance is not new it’s been brewing for decades but it continues to underpin house price growth even in tough economic conditions we’ve all been facing over the last couple of years the obvious issue is one the lack of supply and that’s been driven by building shortfalls the government has set a very ambitious Target of 370,000 new homes a year but in 2024 we built around 200,000 new homes well below what’s needed to meet Target in fact the National Housing Federation estimates the government will fall behind by nearly half a million properties almost a third of the target without significant government support for social house building and firsttime buyers in particular which I’m sure is probably no surprise to you but we are starting from a terrible starting position on all of this to be to be position on all of this to be to be frank this graph shows the completion forecast released in May based on the policy of the previous government you can see that new home completions were actually forecast to drop so to turn the momentum on this is clearly no easy task all the while you have the second issue persistent demand we have an Ever growing population mostly driven by immigration and the real issue with immigration legal immigration is it creates an immediate Demand on housing stop whereas my wife and I have produced two new human beings to the you know to two new human beings to the you know to the population over the last few years that hasn’t put any pressure on housing stop because obviously our kids live with us um of course we also need to with us um of course we also need to consider investor activity is still strong a recent survey by investi Bank found that 77% of individuals earning over half million pounds are looking to increase their UK property investments in response and vestic themselves have launched a UK real estate Equity investment strategy aiming to raise quarter billion pounds to acquire properties over the next couple of years and they’re not alone in this over 4.5 billion was invested in the build to rent sector last year primarily by large private Equity firms year after year the sector is breaking records and attracting even more Investments so clearly this all affects the supply demand equation what happens when demand consistently outstrips Supply prices go up even with economic headwinds this underlying imbalance cushions the market against dramatic crashes it’s why we’ve not had a house price crash in real price terms here’s an analogy think of the US UK housing market as a game of the US UK housing market as a game of musical chairs there are simply too many players so buyers and not enough chairs so houses even if a few players decide to sit out because of recession or affordability issues competition for chairs remains intense and this is the situation we’ve been in over the last couple of years so what could affect house prices into 2025 several factors could shape the UK property Market going into 2025 and they fall into two categories economic shifts and government policies so let’s start with economic shifts interest rates while we saw race rates drop in 2024 the while we saw race rates drop in 2024 the bank of England have already cited themselves that the Chancellor’s most recent budget will add about half a percent to inflation and slow their projections to hitting 2% Target by about a year and of course recession fears if the UK economy stumbles job losses or reduced income growth could lead to less demand for housing putting downward pressure on prices and finally Global factors the obvious economic uncertainty abroad but importantly president Trump love him or hate him he’s clearly very focused on reducing the world’s Reliance on US capital and so increases in tariffs increases in NATO spending from Europe all this stuff helps the US spend less but ultimately puts more financial burden on European nations in short the US wants to pay less and Europe will probably pay more is his aim the second significant thing we need to consider is government policies um stamp duty of course the zero rate threshold will drop from quarter a million to 125,000 and for first time buyers the threshold is dropping from 425,000 to 300,000 now the reason this is important is whenever we see these sorts of upcoming changes you get a flurry of activity as people race to buy and complete pre-april and so you can see from this table it shows monthly transaction volumes and how changes to stamp Duty historically have always created big big spikes in activity just before with then drops after so we’re likely to have a very busy q1 with a likely to have a very busy q1 with a Slowdown in Q2 and then a pick up again Slowdown in Q2 and then a pick up again thereafter the next key thing is of course the renters reform but landlords are facing tighter regulations reduced profitability increasing Supply and this is all going to increase the supply in the sales Market landlords are right now selling more property than has ever been recorded in history right move reported recently that 18% of properties on the market right now A B toet property which is the highest level it has ever recorded So what are the house price forecasts for 2025 so what do the experts say about house prices in 2025 not that they’re often right but the first is Nationwide Building Society they’ve suggested that if interest rates remain stable we might see modest price growth of around 2 to 4% however they warn that any economic shocks could reverse this trend secondly Halifax they predict a more cautious Outlook forecasting flat or slightly negative growth as affordability pressures weigh in more and more in the market thirdly Sav s their long-term analysis points to Regional disparities which I think is completely right so Northern regions and Scotland may see growth while London Southeast could experience stagnation or even declines and finally the office for Budget responsibility their projections align with moderate growth but they emphasize that inflationary pressures could lead to a Slowdown in demand so what’s my take on the market in 2025 it’s impossible to predict the future with certainty we all know that but here’s what I believe based on the data I think we’re going to have short-term stability I expect the market to stabilize in early 2025 it buyers and sellers adjust to the new normal of higher costs I think opportunities for buyers are going to be there if you’ve be waiting for Price drops to significantly fall you may not get what you wish there but areas with high Supply could present good purchasing opportunities and challenges for invest s so landlords and property investors are going to need to adapt their strategies focusing on properties with higher yields or pivoting to different investment types like hmos or commercial spaces or of course just use less debt with investing which is what a lot of our investors are doing they’re just using more cash less debt ultimately the property Market is resilient and while 2025 may not be a year of dramatic changes staying informed and flexible will be key to navigating it successfully I’ll see you in the next video up here