UK house prices will register an increase next year, property portal Rightmove predicted, with London set for a bumper year of growth too amid a boost from rate cuts.

Rightmove on Thursday said 2025 is set to be a ‘buyers market’ as the firm revealed five housing market predictions for next year.

According to the FTSE 100-listed property portal, national average asking prices will rise by 4% in 2025 - the firm’s largest price growth prediction since 2021 - with around 1.15 million transactions expected.

However, with the average number of homes available per estate agent branch at its highest for 10 years, buyers are ‘often spoilt for choice’, the firm added.

This feeds into its expectation of strong competition remaining for sellers, which will likely contribute towards preventing higher price growth, with it noting that ‘2025 is set to be a buyers market’.

Rightmove also anticipates that next year will mark the start of a turning point for house prices in London, which it notes have been lagging, with asking prices in the capital up 12% compared with 21% in Great Britain as a whole compared with 5 years ago.

It expects London price growth to either match or be marginally ahead of national price rises.

Major companies reinstating five-days in the office per week requirements coupled with ‘the fundamental pull of the capital’ for workers and international buyers were cited as justifications for this prediction.

Four base rate cuts in 2025 are expected to drive a decline in average mortgage rates to around 4.0% from the current five-year and two-year fixed rates of 4.83% and 5.08% respectively.

It said 2026 could see further rate cuts but that a return to the historically low rates seen before the cost-of-living crisis will not be witnessed.

Also anticipated for 2025 is first time buyers remaining active, despite an increase in stamp duty from next April.

With the threshold set to lower, Rightmove noted that its real-time data has already identified a rush of first time buyers looking to complete ahead of the changes, in a bid to avoid any, or higher fees.

However, the firm did acknowledge a ‘high availability’ of homes in many areas of England that would still fall under the £300,000 threshold for first-time buyers.

Rightmove’s final prediction for next year contended that remortgaging is set to be a big focus for lenders, as many home movers who ‘fixed for five years during the pandemic frenzy market of 2020’ come to the end of their deal, and face higher rates.

By contrast, Rightmove noted that those who are coming to the end of their ‘post-mini-budget era two-year fixed rate mortgage’ will now see lower costs.

Rightmove analyst Tim Bannister said: ‘We expect a busier year in 2025, with around 1.15 million transactions completed. Stamp duty charges rising from 1st April means we are likely to see a particularly busy first three months of the year as first-time buyers, home-movers and investors all try to complete on planned purchases and avoid higher charges.

‘The effects of stamp duty rising will be felt for the rest of the year too, and we may see some negotiation tactics play out, particularly on properties close to the £300,000 mark, as both buyers and sellers try to mitigate their higher costs through the price agreed.’

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