The UK housing market in 2025 is set for a promising year, with steady growth, stabilising mortgage rates, and rising buyer and tenant demand. Sellers and landlords can take advantage of these trends by understanding key market dynamics and adapting their strategies to meet evolving priorities. This promises to stimulate the market for those looking to buy or rent.
Steady house price growth
UK house prices are forecast to grow by 2.5% in 2025,* building on the resilience shown in 2024. Over the past 12 months, house prices have recorded a modest but stable 1.5%* growth, highlighting the market's capacity to recover amidst economic challenges. This steady recovery makes 2025 an ideal time for sellers to market their properties, as sustained demand and rising disposable incomes improve affordability for buyers.
Increased sales volume
Sales completions are expected to rise by 5% in 2025, reaching 1.15 million transactions.* This marks a significant improvement from 2024, driven by higher buyer demand and a robust sales pipeline. Late 2024 already saw a 19% year-on-year increase in sales agreed, signalling strong momentum heading into 2025.* Sellers should seize this opportunity by ensuring their properties are well-presented and competitively priced to attract motivated buyers.
Affordability resets
Improving household incomes and stabilising mortgage rates are key factors supporting the market’s growth. Between 2022 and 2024, disposable incomes rose by 15%, outpacing house price growth, which increased by just 1.5% in the same period.* This affordability reset makes homeownership more accessible, particularly for first-time buyers who are expected to remain the largest buyer demographic in 2025.
For landlords, the improving financial position of tenants enhances rental affordability, increasing the likelihood of consistent rental income.
Energy efficiency priorities
Energy efficiency continues to shape buyer and tenant preferences. Homes with strong Energy Performance Certificates (EPCs) are highly sought after, as energy-saving features help reduce utility costs. For sellers, upgrading insulation, windows, or heating systems can add value to their properties. Landlords must ensure compliance with energy efficiency regulations to maintain tenant interest and meet legal requirements.
Remote work’s lasting impact
The shift towards remote and hybrid working has reshaped housing demand, with buyers and renters seeking homes that support their evolving lifestyles. Properties with home offices, high-speed broadband, and outdoor spaces remain highly desirable. Sellers can maximise appeal by highlighting these features in their listings, while landlords can attract tenants by adapting properties to include flexible living and working areas.
Rental market strength
The rental market continues to offer strong returns for landlords, with rents forecast to increase by 4.5% in 2025.* Tenant demand remains robust, supported by affordability challenges in the sales market and lifestyle-driven renting. Well-maintained rental properties with energy-efficient upgrades and modern amenities are particularly competitive.
A resilient market for all stakeholders
The 2025 housing market demonstrates remarkable resilience, balancing rising incomes, stabilising mortgage rates, and sustained demand. Sellers and landlords who adapt to these trends—whether through property upgrades, strategic pricing, or targeted marketing—are well-positioned to succeed. All of this will bring more choice for buyers and renters.
Book a valuation today to unlock your property’s potential
Zoopla*
