UK Housing Market Off to Best Start in Three Years

The UK housing market has begun 2025 with its strongest start in three years, according to property website Zoopla, which reported a 12% year-on-year increase in new sales agreed in January.

Zoopla’s latest house price index suggests that some buyers are pushing to complete purchases before higher stamp duty rates take effect in April. The platform noted that "sales market activity that built up over 2024 has carried into 2025," despite concerns over rising mortgage rates and declining consumer confidence in the UK.

The number of homes available for sale has also risen by 10% compared to the previous year, resulting in the highest stock levels per estate agency branch in seven years. "More sellers mean more buyers," Zoopla stated, with housing demand up 13% year-on-year.

The annual house price inflation rate now stands at 2%, a notable increase from -0.9% a year ago, marking the fastest price growth since April 2023. The average UK house price has climbed to £267,700, reflecting a £5,200 increase over 2024. House prices have returned to growth across all regions, with Northern Ireland leading the rise at 7.7%.

Rising sales and increased demand drive market growth amid stamp duty changes.

Demand has also been fueled by the autumn budget announcement confirming that temporary stamp duty relief in England and Northern Ireland will end in April 2025. Zoopla found that first-time buyer demand surged by over a third in November and December, particularly within the £300,000 to £625,000 price range, where stamp duty increases will have the greatest impact.

Zoopla’s monthly consumer tracker also indicated a growing interest in homeownership, with more than a fifth of renters aiming to buy a property in 2025.

Richard Donnell, executive director at Zoopla, highlighted the significance of early-year trends, stating: "The first few weeks of each year tend to provide a clear indication of how the rest of the year is likely to unfold. 2025 has started well, performing better than 2024 and 2023, which bodes well for market activity throughout the year, supported by evidence of more people looking to move."

He also downplayed the impact of the stamp duty changes, noting: "It is important not to overstate the effect of stamp duty increases, as three in five first-time buyers will still pay nothing from April. The additional costs for homeowners remain manageable and are unlikely to dampen sales, though they may help moderate price growth."

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