There were big changes affecting the UK markets and the wider economy in 2024, from new governments here and in the USA to inflation ups and downs.
And, there were big predictions about the Bank of England base rate and mortgage rates dropping significantly in 2025.
We also saw an unusual flurry of activity across the housing market in December and January, due to factors such as stamp duty increases and more – we’ll chat about these shortly.
But now 2024’s wrapped up, most people want to know what the housing and mortgage market is looking like for February and for the rest of 2025.
Is it the right time to buy or sell, or should you be holding tight?
We’re here to update you, explain the reasons for those changes, and how they could impact first time buyers, those considering moving, and owners that need to remortgage.
Plus, we’ll be giving you predictions for the rest of 2025, keeping you informed and helping you make your next move!
Scroll down to read on, or if you’d rather get tailored advice from your local Beewise mortgage expert click here to arrange a call, or ring 01934 204841.
Your guide to the current housing market
December and January are usually the quietest months for the housing market, with people winding down their searches in the lead up to Christmas.
The market then tends to pick up again around March, with the new season bringing out new homebuyers, and those looking to sell their homes and make a change.
However, the last couple of months have seen an unusually high level of activity, partly due to the long-awaited Bank of England base rate cuts giving people more confidence in the economy.
But it’s mainly thought the uptake was due to stamp duty rates rising from the 1st April this year, announced in 2024’s Autumn Budget¹.
This means first time buyers will start paying stamp duty at £300,000 instead of £450,000, and home movers will start paying it at £125,000 instead of £250,000.
Completing by 31st March 2025 means some buyers could potentially save £6,250, so the rush to beat the deadline is totally understandable!
Plus, many hoped stamp duty cuts and support for first time buyers would be announced at the Budget. And, when they weren’t, they decided to make their move and save now.
According to Right Move’s property expert, Tim Bannister, the effects of stamp duty increasing will affect the rest of the year too.
He thinks “we may see negotiation tactics, particularly on properties close to the £300,000 mark, as buyers and sellers try to mitigate their higher costs through the price agreed.”.
What does this mean for 2025 house prices?
Well, house prices rose by 0.7% in December according to Nationwide², and total house price growth in 2024 was 4.7% – the third strongest year in the last decade after 2020 and 2021.
It’s predicted asking prices for homes will increase by 4% by the end of next year³, which may sound a lot, but is actually in line with the long-term average.
This means both buyers and sellers can feel confident to carry on with purchases, knowing the housing market is moving at a steady pace again, hopefully with no major ups or downs.
As well as keeping an eye on predictions, Beewise mortgage advisors also stay up to date with the housing market through links with local estate agents and personal experience.
We’ll also give advice when you’re viewing properties, so can help you decide if the asking price is right for the area, and if it’s worth you making an offer, and by how much.
Beewise won’t just get you the most suitable mortgage deal, we’re on hand throughout your homebuying journey with expert help and support you can trust.
So, if you’re thinking of moving or buying your first home, email us or give us a call on 01934 204 841. And, check out this handy beginner’s guide if you’re a first time buyer.
What’s happening to mortgage rates right now?
Great question, although the answer seems to be changing daily at the moment!
In positive news, the Bank of England made two cuts to the base rate in 2024 after seeing inflation rates stabilise.
But, the December meeting of the Monetary Policy Committee signalled a steady approach to easing the base rate in 2025, unlike the drastic cuts some predicted back last year.
The Bank of England are now waiting for an emphasis on economic growth, instead of inflation around the 2% target². Slow and steady is good for the mortgage market though!
So what do changes in the base rate mean for mortgage interest rates then?
Well, although the two aren’t directly linked, when the base rate comes down, lenders tend to decrease mortgage interest rates to reflect the money they’re saving.
However, in recent weeks a lot of banks and building societies have been increasing rates due to concern around the outlook for inflation and the government’s spending plans⁴.
The global economy also has a huge influence, with policies adopted by the US and responses by the UK, EU and China having an impact⁵.
This means the wider money markets have been up and down with their rates lately, which generally leads lenders to follow suit and increase their interest on deals for new mortgages.
The hope is that through the course of the year this will settle down, as lower mortgage rates can mean lower monthly payments or a shorter mortgage term.
Lower rates could also increase the amount you can borrow, with affordability potentially improving if monthly payments come down.
For 2025 mortgage rate predictions, scroll on. But if you’re looking to buy, get in touch now! Your local Beewise advisor can calculate your maximum borrowing and monthly payments.
And, if your fixed rate mortgage is coming to an end this year, we’d recommend contacting us too, as Beewise can secure a new deal 6 months in advance.
That way, you’ll have the security of knowing what your future payments will be now, plus we’ll keep an eye on the market and switch your deal if a better option comes up.
Should first time buyers wait, or invest right now?
We’d always recommend talking your specific situation through with Beewise – call 01934 204 841 to chat to your local advisor today.
But, with the end of 2024 bringing more stability to the housing and mortgage market, if you’re thinking of buying then now’s a good a time as any!
It’s worth considering that if you’re in a rented property right now, that’s equivalent to a 100% interest rate – not a single penny is going towards clearing your own mortgage.
And with properties not getting snapped up as quickly, you’ll have time to find the dream home, and maybe even negotiate on the asking price.
If you’re thinking of buying in 2025, getting a mortgage in principle – your pre-approval to offer on a property – before you start viewing is vital.
It’ll give you a clear picture of your buying potential, and your local Beewise advisor could secure one within 24 hours of receiving your paperwork.
You might have checked online calculators, but we’ll work out accurate borrowing figures so there’s no nasty surprises when you do get an offer accepted.
Plus, we’ll work out potential monthly payments, advise on other buying costs and more. Contact us to arrange a call so you can make an informed decision on what’s right for you.
How does the housing market affect selling a home?
There are always ups and downs with moving house, but you should consider your current position and the wider market.
While mortgage interest rates might still be higher than the last few years, your Beewise advisor can look getting monthly payments to fit your budget if you’re looking to upsize.
And, when mortgage interest rates are low, properties tend to be in higher demand - AKA more expensive! So, it’s worth looking to make your move now.
If you’re fixed into a deal with your current lender, we can also consider switching your mortgage to a new property, keeping your current rate and even borrowing more on top.
Your local advisor will look into all options, comparing rates and monthly payments across the mortgage market to make sure you’re getting the most suitable deal.
If you’re looking to downsize we’ll review your current mortgage in the same way, and you could potentially get more house for your money than this time last year!
It’s also important to consider why you want to buy and sell. A property investor views the market in a different way to someone with a growing family, or with a house too big for them.
We’ll discuss more detailed predictions for the 2025 market below, but if you contact your local Beewise advisor we’ll talk through the possibilities of improving your life right now!
When should you remortgage if your fixed rate is ending?
With reductions to mortgage interest rates predicted, it could be tempting to hang fire on remortgaging, or waiting until your fixed rate ends to do so.
But, here are 3 reasons why Beewise should secure you a new rate sooner rather than later:
1. Reserving a new rate up to 6 months in advance means you can prevent stress by budgeting for potential payment increases now.
Until your new mortgage goes into effect, your local advisor will also keep an eye on market changes, switching you to a new deal if a more suitable rate comes up.
2. The remortgage process can take a couple of months, depending on the legal work required.
Leaving it till the end of your current deal means you could switch to the lender’s standard variable rate if the new one doesn’t go through in time, paying much more each month.
3. Staying on the lender’s standard variable rate and hoping mortgage deals reduce may seem like a good option, but there’s no guarantee the base rate – and lender’s rates – won’t increase again.
There’s usually an overall saving by switching to a new deal now vs paying more each month in the hope rates drop, but your Beewise advisor will happily calculate that for you!
We can also look at wider range of products for you, from tracker mortgages that follow the Bank of England base rate to deals with no early repayment charges.
That way, you could secure a rate now and potentially switch to a fixed deal later in the year. As mortgage experts, we’ll work out all the options available so you’re fully informed.
Predictions for the 2025 mortgage and housing market
Definitely what we’re asked most right now! Beewise always stay informed on the market and its predictions through experience, estate agents and lenders, and financial forecasts.
However, unforeseen changes – be it in the government, a pandemic or a war – can mean predictions change quickly, so we can never say for certain what’ll happen in 2025.
But, we’re hoping now the UK and US elections are out the way, the markets will start to settle, and it’s thought any changes will be slow and steady.
With regards to interest rates, it’s supposed there’ll be around four cuts to the base rate in 2025² – less than expected – although some conservative forecasts are saying two.
Mortgage interest rates themselves are likely to sit between 4% and 5% this year⁵, so gone are the days of those 1% and 2% deals.
This isn’t wildly different from pre-pandemic interest rates, and as 4% is thought to be the new normal, now’s a good a time as any if you were holding off from buying.
The housing market is also looking positive for 2025, with around 1.15 million completions predicted for 2025, an increase on recent years thanks to market conditions improving¹.
The best way to stay on top of latest news is to follow Beewise on Instagram and Facebook. We’ll always share it on our socials, and keep you informed with advice and expert guidance.
But overall, we’re hopeful 2025 will be a much calmer year for the housing and mortgage market, with any changes being positive ones.
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To get in touch with your local Beewise advisor, ring our office on 01934 204 841 or email to arrange a call, with evening and weekend appointments available.
Looking for more expert mortgage advice? Check out these other helpful blog posts!
Please note some of these blogs may be older than 12 months and therefore the information contained in them may be out of date. Contact us direct for up to date information.
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