With 2025 now well underway, the question on all homebuyers’ minds is whether now is a good time to get on the property ladder. It’s an important consideration before purchasing a property - so how is this year starting to look ?
Housing market updates 2025
2025 is shaping up to be a buyer’s market, with experts at Rightmove revealing that homebuyers will have more choice due to a rise in the number of houses up for sale, and the likelihood of those homes staying on the market a little longer.
And according to a report by Knight Frank, analysts say that the impact of October 2024’s UK budget is unlikely to affect the property market even by the end of 2025. But what about mortgage rates?
Are mortgage rates going down?
Economists are optimistic about the prospect of further reductions in UK mortgage rates for 2025.
Current mortgage rates are around 4.3 to 4.59% across the ‘big six’ lenders* for two and five-year fixed rates. Data supplied by Podium shows that these rates are anticipated to go down as we progress throughout 2025.
While financial services company Morningstar has reported that the Bank of England’s base rate is expected to drop to around 4% by the middle of the year, with further interest cuts on the cards as inflation stabilises. These predictions are based on the steady downward trend seen towards the end of 2024 and into 2025, with the Bank of England reducing the base rate (also known as the Bank Rate) by a further 0.25% to 4.5% in February. That decision means interest rates are now at their lowest point since June 2023.
Stamp duty rates
The UK Government has announced changes to stamp duty thresholds from April 1, 2025, which will impact all home buyers in England, including changes to stamp duty for first time buyers.
Currently, first time buyers in England are exempt from stamp duty land tax (SDLT) on homes valued up to £425,000 - this is referred to as the nil-rate threshold. However, from April 1 this year, the nil-rate threshold for first time buyers will drop to a maximum house price of £300,000. Properties between £301,000 to £500,000 will be charged 5%.
For homebuyers replacing their main residence in England, stamp duty thresholds from April 1 will be:
- Up to £125,000 0
- The next £125,000 (the portion from £125,001 to £250,000) 2%
- The next £675,000 (the portion from £250,001 to £925,000) 5%
- The next £575,000 (the portion from £925,001 to £1.5 million) 10%
- The remaining amount (the portion above £1.5 million) 12%
You can use our stamp duty calculator nearer to the time to see how this might affect you.
House prices in 2025
With lower mortgage rates making it more affordable for more homebuyers to enter the UK property market, it is hoped an increase in house sales will follow ensuring more people can find a home to meet their needs. Some experts believe UK property prices will then go up due to high demand.
However, a report by Hamptons suggests that house prices are only expected to slightly rise in 2025 by 1-3%, and by around 4% in London. The average UK house price is forecast to reach £300,000 this year.
Any support for first time buyers?
The Times recently reported that a number of banks and building societies are now offering the First Time Buyers Boost, an affordability scheme that enables new homebuyers to borrow more money towards a property. Typically, banks will lend between 4-4.5 times your income, whereas with the boost mortgage, some banks may multiply your salary by as much as 5.5.
“It’s a great time for first-time buyers to purchase a home, with many banks lending on average up to £50 to £60k more than they did last year through the enhancements to affordability, and various income boost schemes,” says Andrew Mannion, Group new build development director at Mortgages First & RSC New Homes.
Growing demand for new homes
Statistics show that there was an increase in the number of new homes for sale in 2024. A study by the National House Building Council (NHBC) recorded 28,724 new builds as registered to be built in the latter part of 2024.
In addition, the government has announced plans to accelerate housebuilding to build 1.5 million new homes over the next five years. This is all positive news for homebuyers looking for a new home with supply set to increase to keep pace with demand.
Benefits of a new build
One of the many property debates whether UK new builds are more valuable than older properties? This depends on individual buyers’ preferences. Both new builds and older properties have their place in today’s housing market, depending on whether you rate the period features of older homes above the convenience, energy efficiency and specification of a newly built home. Fortunately for Redrow buyers, the Heritage Collection combines all the character of an older property, thanks to its Arts and Crafts influenced exteriors, with high specification modern interiors.
With a new Redrow home, everything is already done - and to a high standard - which saves you time and money. They hold their value too, often exceeding their original ‘for sale’ price when sold on, according to Andrew. By opting to buy a new build, there’s also a chance you may be able to borrow more towards your home.
Andrew is a specialist in new build mortgages and a broker from our trusted network of mortgage advisors. He said: “Usually lenders lend more for a new build and will offer enhanced affordability. This is mainly due to the energy efficiency and low medium-term costs involved. In the eyes of the lender, your bills will be lower, so you’ll be able to pay more on your mortgage.”
Energy efficient homes - are they the future?
The Future Homes Standard (FHS) is a new standard set to be introduced this year that will make all UK new builds more energy efficient. Under this standard, new homes built from 2025 must emit 75-80% less carbon emissions.
Lower emissions will mean lower utility bills, so it’s no wonder eco homes are growing in popularity. This demand will add value to your property, too, should you sell. Some lenders will even offer more competitive rates for eco-friendly homes, which is worth bearing in mind in the form of ‘green mortgages’.
Andrew added, “Energy efficiency adds value to your property as eco homes are viewed as a long-term investment due to their cost-saving benefits. This is factored into house valuations in the majority of circumstances and makes the re-sale of your home an attractive option.”
Buying a Redrow home in 2025
There are many reasons to buy a new build in 2025 and beyond, from saving on your electricity and heating thanks to their energy efficient features, to being able to move straight in.
At Redrow, we promise to offer a better way to live.
Not only are our homes hand crafted to the highest standard, they’re also designed to be more sustainable - we call this our ‘fabric first’ approach. This means energy efficiency is built into their very fabric via top-of-the-range insulation and heating systems, with the addition of air source heat pumps to provide heating and hot water in our Eco Electric homes.
Andrew Mannion added: “Redrow homes are rated A or B for energy efficiency. Lenders will lend more on energy-efficient homes under their green mortgage schemes. With this rating, we sometimes see enhanced lending of up to 50K on average.”
Support for first time buyers and movers
We offer several schemes and initiatives to help you budget, from the government’s First Homes scheme to the Deposit Unlock, a partnership between lenders and housing developers. And with Redrow, you’ll gain access to our recommended independent mortgage advisors who can help you secure some of the best mortgage deals.
Why not browse our beautiful homes today to begin your buying journey with us and make 2025 your best year yet?
*Rates correct as of January 13, 2025
