2025 Surrey/Berkshire Housing Market Forecast
If you are considering buying a home in 2025, or are among the large clutch of homeowners with a remortgage coming up, you’ll naturally be keeping a keen eye on expert predictions and housing market forecasts.
Now, there’s LOTS of information out there so – to make things easy for you – we've done some detailed digging and desk research to collate a consolidated view here. This blog will give a high-level forecast for 2025 and pick out a few things to look for in the year ahead. But first, we’ll round off what we’ve seen in the UK housing market in 2024...
A quick look back at 2024
It is fair to say the 2024 housing market surpassed most expectations. It weathered ‘storms’ like higher mortgage and rent costs and proved generally resilient. This somewhat confounded experts, who had expected house prices to stay flat or fall over the course of the last 12 months. But, in fact, average sale prices are expected to have risen by more than 3% in 2024 (having previously dropped by 1.4% in 2023).
The better-than-expected activity in the housing market this year has been underpinned by strong wage growth (tracking at 5.2% in October), as well as slightly lower mortgage rates – aided by two Bank of England interest rate cuts twice in August and November, bringing this down to 4.75%.
2025 housing market forecast
If you’re wondering whether 2025 will be a good year to buy a house in the UK, here’s what you need to know...
House prices in 2025 are predicted to continue to grow at a similar or slightly faster rate than that seen in 2024. Meanwhile, the record rent increases seen in the year just gone are likely to return to more normal levels.
2025 should also see interest rates continue to come down, with leading economists predicting between two to three rate interest rate cuts, which would see the current 4.75% rate fall to potentially 4% by the end of the year. However, with inflation proving stubbornly ‘sticky’, the rate at which interest rates (and the cost of borrowing money) come down, is now expected to be a little slower.
Anecdotally, a further positive indicator for the property market is the growth of household incomes, and the fact that this is currently outpacing house price growth – another trend expected to continue in 2025.
Other things to look out for in 2025
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Livelier-than-usual first quarter
The traditional spring market could come early in 2025, with a busy January to March being driven by the impending changes to stamp duty from 1 April. This will naturally cause a surge in demand. Indeed, Rightmove data suggests that activity among first-time buyers is up 13% versus the same period last year ahead of the April deadline. This flurry of activity could, conversely, mean a brief drop-off immediately afterwards in April.
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Asking prices on the up
Having looked across a range of forecasts from property industry experts including Nationwide, Halifax, Jones Lang LaSalle, Savills, Knight Frank, Chestertons and Rightmove, the estimations range from 2% to 4% price growth in 2025.
Property portal, Zoopla, meanwhile expects house prices to rise by 2.5% over 2025, and 7.5% over the next three years.
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Lower mortgage rates
Currently, the average two-year fixed mortgage cost is at around 5.08%, while the average five-year fix is at 4.83%. Experts are widely expecting these to fall over the course of 2025 – potentially to around the 4% mark.
However, buyers holding out for the cheapest rates may need to be patient. Since the autumn budget announced by Rachel Reeves, most economists have scaled back their forecasts for further rate cuts because the proposed £40bn of tax rises are expected to push up inflation.
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Advantage for buyers?
Rightmove expects 2025 to see a continuation in respect to it being a strong market for buyers. This forecast is based on the large amount of choice of properties available, and the longer average lead times for completions giving would-be buyers a slight advantage in negotiations.
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Smart buys for investors
Savills has an unrivalled research team and so are always a good estate agent to look to for advice and predictions. One of the things they provide guidance on is ‘best buys’ and areas ripe for residential investment in the year ahead. In 2025, one prediction they have made stood out to me based on how strong our schools are across Surrey Heath and into Berkshire. Savills expect family houses in educational ‘super towns’ - areas near outstanding state schools – to be in huge demand due to a forthcoming rise in VAT on private schools.
If you’re thinking of moving and would like to discuss when would be the best time to market your property, feel free to get in touch.
Lucy Egan
Managing Director
01276 491 740
