January Market Review – Positive Start to 2025
Welcome to our latest market update! The Bank of England recently lowered the base rate from 4.75% to 4.5%, and while we’ll discuss its implications later, let’s first review how the market performed in January.
Property Market Trends in January
The month began with some challenging weather, which impacted activity levels slightly. We saw a small dip in the number of new listings compared to the same time last year. However, sales data tells a more positive story. According to TwentyEA, sales in our region were up by almost 10% year-on-year, and the average sale price increased by around 4%.
First-Time Buyers Leading the Way
One of the most striking trends in January was the surge in first-time buyers. Our business registered approximately 30% more first-time buyers than the same period last year, marking a record high for January. This is a great sign for the market, as first-time buyers are essential in keeping transactions moving, allowing sellers to progress up the property ladder.
Some have suggested that this spike in activity is due to the upcoming stamp duty changes on April 1st, which will see the threshold for first-time buyers drop from £425,000 to £300,000. While this might be a contributing factor, given that most transactions take around four months to complete, it’s unlikely to be the sole reason. Instead, the increasing cost of renting, financial support from family, and growing mortgage accessibility are playing a bigger role. Lenders are showing more willingness to offer higher loan-to-value mortgages, including 95% and even 100% mortgages, making it easier for first-time buyers to enter the market.
How Interest Rates Are Affecting the Market
The Bank of England’s base rate cut last week also helped boost market sentiment. While mortgage rates are more influenced by the 10-year gilt yield, any reduction in the base rate often reassures buyers and lenders alike. This, combined with more mortgage options tailored for first-time buyers, explains the increased activity we’re seeing.
What’s Next for 2025?
So, all in all, a promising start to 2025. Our market forecast for the year remains positive, with steady price growth anticipated. We’ll continue to track developments and keep you updated in the months ahead.
Thanks for reading, and see you next month!
