Property Market Update – March 2025

March 2025 Property Market Update: Pricing Sensibly in a Changing Market

As we step into spring, the UK property market is showing signs of stability, with house prices maintaining modest growth. According to Zoopla, average house prices have increased by 1.8% year-on-year, with a projected rise of 2.5% by the end of 2025. However, with an increasing number of homes available on the market, buyers now have more choice, which is helping to keep price inflation in check. For sellers, this means that realistic and competitive pricing will be key to securing a sale in 2025.

Regional Differences in House Price Growth

The property market continues to display a significant north-south divide. London’s property values have risen by just 2.3% in the past year, and the South West has seen a 2.7% increase. In contrast, the North East has experienced the strongest growth in the UK, with a remarkable 9.1% rise in house prices over the past 12 months. Other regions, such as Wales, the East Midlands, and the North West, have also recorded strong growth rates of over 6% annually (Source: ThisIsMoney.co.uk).

This surge in property prices in certain regions may be partially explained by buyers rushing to complete transactions ahead of the stamp duty changes coming into effect on 1 April. When tax changes such as these are introduced, we often see a temporary acceleration in market activity, followed by a cooling-off period as the market adjusts.

Impact of Stamp Duty Changes

From April, the "nil rate" stamp duty bands in England and Northern Ireland have shrunk, meaning that some buyers will face increased costs when purchasing a home. Historically, when stamp duty adjustments occur, buyers try to complete purchases before the changes take effect, which can lead to a short-term dip in transactions once the new tax rates are in place. According to data from Nationwide, they recorded no month-on-month house price growth in March 2025, following a 0.4% increase in February, likely reflecting this pattern.

Iain McKenzie, CEO of the Guild of Property Professionals, has commented that we should expect a period of adjustment as buyers and sellers reassess their plans in response to these tax changes. Nationwide’s chief economist, Robert Gardner, supports this view, noting that while market activity may soften in the short term, it is expected to recover steadily as we move into summer. He suggests that, despite wider economic uncertainties, conditions remain favourable for homebuyers in the UK (Source: Nationwide).

Is Now the Right Time to Sell?

For those considering selling their property, the current conditions could present an opportunity. With many buyers having rushed to complete purchases before the stamp duty changes, there may now be less available stock in the immediate aftermath. This means that sellers who list their properties now could face less competition from other vendors.

In practical terms, fewer competing sellers mean that well-priced properties are more likely to stand out and attract serious interest from motivated buyers. Sellers who price their homes correctly from the outset will be in the strongest position to secure a sale without prolonged delays or the need for price reductions later on. Overpricing, in contrast, may deter potential buyers who now have a wider range of options to choose from.

Looking Ahead

As we move further into 2025, the property market is likely to stabilise following the initial fluctuations caused by the stamp duty changes. Buyers may take a cautious approach in the short term, but as we head into summer, activity is expected to pick up once again. For those looking to move, staying informed about market trends and seeking professional advice will be key to making the most of the opportunities ahead.

Whether buying or selling, understanding these shifting dynamics will help individuals navigate the market effectively and make well-informed decisions about their next steps.

Aidan Donnelly, MNAEA