Rightmove predicts national average asking prices will rise by 4% in 2024. Whilst this is Rightmove’s largest prediction for price growth since 2021, it’s in-line with average long-term price growth.

The Covid influenced years of 2020, 2021 and 2022 saw larger increases in prices. One factor for this was the imbalance between supply and demand – there was a lot of pandemic-driven demand for property, while supply was constrained.

The average number of available homes per estate agent branch is at its highest for this time of year in 10 years, so while the number of buyers in the market is significantly higher than this time last year, they’re often spoilt for choice.

Rightmove expects the number of homes for sale to remain high next year, which means strong competition will remain for sellers, which will likely prevent higher price growth. However, these factors will also help agreed sales, and Rightmove anticipates a higher number of transactions in 2025 of around 1.15 million in total.

London

Compared with five years ago, the average asking price for a home in London is up by 12%, whilst for Great Britain as a whole, asking prices are up by 21%.

In 2019, the price of a home in London was more than double (+101%) the Great Britain average, whereas now, the gap has reduced to 86%.

The Brexit year of 2019, and the subsequent Covid influenced years saw slower price growth for the London sales market. In 2019, average asking prices fell in London by 0.5%, compared to a 0.8% rise across the UK as a whole.

However, Rightmove anticipates that 2025 could be the beginning of the price turning point for the London market, with the fundamental pull of the capital for both workers and international buyers predicted to start to reassert itself, helped by some major companies heading back to the office five days a week.

Rightmove expects London price growth to be in-line, if not marginally ahead, of national price rises.

Mortgages

Rightmove predicts that the average five-year fixed, and two-year fixed mortgage rate, are likely to be around 4.0% by the end of next year, based on current market trends.

This is lower than the current 4.83% and 5.08% for the five-year and two-year fixed rates respectively and it will help improve affordability and further boost consumer confidence.  There may be room for rates to come down a bit more in 2026, but we will not see a return to the historically low rates seen prior to the cost-of-living crisis. The future path of mortgage rates, even in 2025, is difficult to forecast as they are greatly dependent on the impact of a wide variety of unpredictable factors, including geo-political tensions and inflation.

During this period two-year fixed rate mortgages are likely to become even more popular as the gap closes with five-year fixed rates, and it becomes less attractive to fix for longer. Two-year fixed rates have been the more expensive option over the last couple of years, but the gap is currently the smallest it’s been this year. This is reflected in UK Finance data, where the gap in proportion of people taking out a two-year versus a five-year fixed rate mortgage has closed compared with last year.

First-time buyers 

The rate at which stamp duty is paid for both first-time buyers and home-movers in England is set to lower from 1 April. The impact could mean thousands of pounds extra in moving costs, and Rightmove’s real-time data has already identified a rush from some first-time buyers in expensive areas to try and complete before then, and potentially avoid any, or higher fees.

However, while this is likely to pull forward some planned moves, in many areas of England there is still a high availability of homes that would fall under the £300,000 threshold for first-time buyers. They would also benefit from a large tax advantage over second home buyers and most trader-uppers.

The number of first-time buyers that are active in the market and sending enquiries to agents is 13% ahead of the same period last year. With buyer affordability continuing to improve next year, and rents still rising, Rightmove predicts it will be an active year for this market sector.

Remortgaging

It is set to be an important year for remortgaging for lenders, with many home-movers in different circumstances coming to the end of their fixed-rate deal. There will be many movers who fixed for five years during the pandemic frenzy market of 2020, who may now face higher mortgage costs.

For example, someone who took out the average five-year fixed rate at this time in 2020 of 2.55%, would currently be looking at an average remortgage rate of 4.89% for another five-year deal.

By contrast, there will be other movers rolling off a post-mini-Budget era two-year fixed rate mortgage who will now see lower costs.

Someone who took out the average two-year fixed rate at this time in 2023 of 5.48%, would currently be looking at an average remortgage rate of 5.19% for another two-year deal.

The result of this is that the market for remortgaging and product transfers is likely to be a big focus for lenders in 2025 as they look to attract home-movers with their product offerings.

Rightmove’s Tim Bannister said: “We expect a busier year in 2025, with around 1.15 million transactions completed. Stamp duty charges rising from 1^st 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.”

Matt Smith, Rightmove’s mortgage commentator, added: “It is likely to be a mixed year for the market. Those who took out peak-mortgage rate two-year fixes after the mini-Budget will see their deal come to an end and will likely find themselves with lower costs next year. Combined with wage growth, they may feel some significant affordability improvements. By contrast, many movers will be rolling off a relatively low five-year fixed rate agreed during the busy market of 2020 and will see costs rise. With remortgaging and product transfers set to be an important theme for lenders next year, we’ve launched a remortgage rate tracker to show the latest trends in this sector and monitor lender behaviour next year.”