The average price of a UK property coming to the market has decreased by £6,395, or 1.7%, this month, according to data from property portal Rightmove (RMV.L). The typical cost of a home has now fallen to £360,197.
This decline is in line with the usual December fall, as highlighted by Rightmove. Despite this month’s drop, prices are still 1.4% higher than in December 2023 and broadly in line with the portal’s expectation of 1% growth in prices this year.
Stronger Activity Than Last Year
Despite the festive lull, activity remains much stronger than the same time last year. Rightmove found that:
- The number of sales being agreed up by 22%
- New buyer demand is up by 13%
This increased activity is a positive sign for the property market, and Rightmove expects to see a further pick-up in the coming days.
The "Traditional Boxing Day Bounce"
Rightmove has observed that there is often a surge in activity after Christmas, which they refer to as the "traditional Boxing Day bounce". This phenomenon occurs when people return from their holidays and start searching for properties again. With this year’s data showing a strong increase in activity, it seems likely that we will see a similar trend.
Impact of Stamp Duty Deadline
Rightmove’s data also suggests that the looming stamp duty deadline of 31 March is having an impact on seller behavior. In areas with higher-priced properties, sellers are trying to beat the deadline to avoid paying higher taxes on smaller properties.
As stated by Tim Bannister, Director of Property Science at Rightmove:
"Each year, our real-time data can pinpoint the exact moment that the turkey is finished, family games run out of steam, mobile devices are picked up, and prospective movers flood onto Rightmove and get their 2025 move started."
Bannister’s comment highlights the importance of timing in the property market. For those who act quickly, there may be plenty of fresh property choice to consider.
The Bank of England’s Interest Rate Decision
The Bank of England is set to announce its latest interest rate decision on 19 December. With rates expected to remain at 4.75%, it will be interesting to see how this decision affects the market.
Rightmove notes that a bank rate cut and some mortgage rate falls early in the year would help to settle the market and provide a boost to sentiment and consumer confidence.
UK Property Asking Prices Set to Rise by 4% in 2025
Separately, Rightmove released research indicating that national average asking property prices are expected to rise by 4% in 2025. This is a positive sign for the market, but there are still headwinds to consider.
As noted by Bannister:
"Headwinds remain, with the impact of budget measures being a challenge."
Mortgage Lending Expected to Rise
According to figures from UK Finance, mortgage lending for buying a home is expected to rise 10% to £148bn in 2025. This increase in lending will contribute to market growth and help to improve affordability.
The trade association also estimates that total mortgage lending for house purchases will come in at £135bn for 2024, up 11% on 2023.
Overall, the data from Rightmove and UK Finance suggests a mixed picture for the property market. While prices have fallen this month, activity remains strong, and there are signs that the market will be stronger than last year. However, headwinds such as the impact of budget measures and interest rates remain a challenge.
As we move into 2025, it will be interesting to see how these factors play out and what the future holds for the UK property market.