Published: 03/11/2024
Following the Labour government's announcement at the end of October as to the various fiscal policies being implemented to raise taxes, UK house prices are likely to edge higher by the end of 2024, an indication that the housing market has remained resilient this year after the drops we saw in 2023. So how will house prices perform in 2025?
Mount & Minster's forecast is that house price growth in Lincolnshire, Nottinghamshire and Leicestershire will increase marginally from 1.2% in 2024 to 1.7% in 2025, as confidence is restored following multiple drops in the Base Rate and consequently lower mortgage rates.
House price growth is anticipated to then increase by 2.6% from 2026 supported by nominal earnings growth. We anticipate the average house price in the East Midlands to stand at £310,000 by 2028.
The number of property transactions are also predicted to increase from around 275,000 a quarter in 2024 to about 350,000 a quarter from April 2025. This will be heavily fuelled by the government’s proposed changes to the National Planning Policy Framework as part of wider reforms to the planning system that will result in a significant increase in new builds being built and consequently sold.
Ralph Wyrley-Birch, Senior Partner at Mount & Minster, comments "Our research and robust market data analysis will be very much welcomed by our valued clients, as their homes will begin to see higher increases than has been witnessed from the end of 2022 with the drop in values across the board. While the Chancellor's announcement to significantly penalise small and medium sized businesses to make up the majority of the tax increases will undoubtedly result in the cost of products and services from these companies to rise so as to cover the increased tax liability, having an adverse effect on inflation at a time when it was starting to be tamed below 2%, this is expected to be offset by the reduction in interest rates at the end of 2024 and throughout 2025."