The UK property market is currently undergoing some noticeable changes, affecting everyone from homeowners and landlords to buyers and tenants.
With interest rates fluctuating, house prices adjusting, and rental demand continuing to grow, staying informed about the latest trends is more important than ever.
Whether you’re looking to move, invest, or understand what’s happening in the property market, knowing where things stand can help you make better decisions.
Over the past year, economic conditions have played a major role in determining house prices and mortgage rates. Many potential buyers are watching interest rates closely, while sellers are deciding whether now is the right time to list their property. At the same time, landlords are facing ongoing legislative changes, and tenants continue to deal with increasing rental costs.
March is often a busy period in the property market, with the arrival of spring encouraging more people to buy and sell. However, as expected by many in the industry, there was no mention of a Stamp Duty deadline extension in the recent spring statement. That means April 1st could come as a costly blow for thousands of home movers and first-time buyers who now face an extra £2,500 in stamp duty charges.
Industry voices, including Rightmove, had been calling on the Chancellor to offer a short extension to help those already mid-purchase complete their transactions without being stung by the extra cost, but this has not materialised.
Understanding these developments and their potential impact can help buyers, sellers, landlords, and tenants plan their next steps with greater confidence .
Market Overview: Trends and Influences
During February, UK house prices experienced a slight decline of 0.1%, bringing the average property value to £298,602. This unexpected dip follows a period of consistent growth.
The Royal Institute of Chartered Surveyors (RICS) reported that February marked the weakest month for the housing market since late 2023. A net balance of 14% of agents and surveyors noted a drop in new buyer enquiries, the lowest since November 2023. Additionally, 13% reported a decrease in agreed sales, with London experiencing a more pronounced downturn.
Mortgage rates have also seen some fluctuations. As of March 1st, the average two-year fixed mortgage rate stands at 4.87%, down from 5.01% at the start of February. The average five-year rate decreased to 4.69% from 4.81% over the same period. However, concerns about rising inflation may influence future rate decisions.
It’s not all bad news though! Some regions continue to show resilience and the recent reduction in the Bank of England’s base rate to 4.5% may lead to more competitive mortgage deals, potentially easing the path for prospective buyers.
Recap:
How have UK house prices changed recently?
UK house prices saw a slight decline of 0.1%, bringing the average property value to £298,602.
What are current mortgage rates?
As of March 1st, the average two-year fixed mortgage rate is 4.87%, and the average five-year rate is 4.69%.
Is now a good time to sell my property?
With the traditional spring surge, it can be a great time to sell. However, setting a realistic price and ensuring your property is well-presented are crucial.
How is the rental market performing?
Rents continue to rise, with private rental prices increasing by 8.7% in the 12 months to January 2025. Tenant demand remains high, making it a strong market for landlords.
March Insights for Homeowners and Sellers
For home owners considering selling their properties, current market conditions present both challenges and opportunities.
- Pricing Strategy : With the recent softening in house prices, setting a realistic and competitive price is essential to attract potential buyers.
- Market Timing : The traditional spring surge in property listings is approaching. Listing your property during this period can increase visibility and buyer interest.
- Property Presentation : Investing in minor renovations and ensuring your home is well-presented can significantly impact buyer perception and, consequently, the final sale price.
Considerations for Buyers
Prospective buyers should navigate the current market with careful planning.
- Mortgage Preparedness : Securing a mortgage agreement in principle can strengthen your position when making offers, especially as lenders adjust rates in response to economic indicators.
- Market Research : Stay informed about regional price trends. For instance, while some areas have seen price declines, others have experienced annual growth.
- Energy Efficiency Matters : With energy prices still a concern, many buyers are prioritising homes with good insulation, modern heating systems, and higher EPC ratings. Choosing a property with energy-efficient features can mean lower bills and improved resale value in the long term.
Rental Market Dynamics
Both tenants and landlords are experiencing changes in the rental sector.
For Tenants
- Rising Rents : latest figures show that average UK private rents increased by 8.7% in the 12 months to January 2025, slightly down from the 9.0% rise in December 2024.
- Increased Competition : With a limited supply of rental properties, tenants may face heightened competition and should be prepared to act swiftly when suitable properties become available.
View our latest property for rent in Tower Hamlets here.
For Landlords
- Regulatory Compliance : Staying updated on legislative changes is crucial.
- Investment Opportunities : Despite challenges, the rental market continues to offer solid returns, especially in regions with high demand. Evaluating local market conditions can help identify lucrative investment opportunities.
Find out more about our property management services here.
The Future Outlook
The property market’s trajectory will depend on various factors, including economic policies, interest rate decisions, and regional supply and demand dynamics.
- Interest Rates : The Bank of England’s recent base rate reduction to 4.5% reflects efforts to balance economic growth with inflation control. Future rate decisions will influence borrowing costs and, consequently, property affordability.
- Government Policies : The recent spring statement addressed housing affordability and the Chancellor, Rachel Reeves’ plans to shake up planning rules and ramp up housebuilding could offer some longer-term relief. However, any real impact is still likely to be years away.
- Regional Variations : The north-south divide in house price growth is expected to persist, with northern regions potentially outperforming southern counterparts.
Need Expert Guidance?
Navigating the current property market requires informed decision-making. At City Realtor, we offer tailored advice to meet your unique needs. Whether you’re buying, selling, renting, or letting in Tower Hamlets, our team is here to help. Contact us on 0207 790 7702 or email admin@cityrealtor.co.uk to discuss your property needs.
What Next?
City Realtor brings you all the latest property market news each month. For more localised property news in Tower Hamlets, please contact the team at City Realtor.
Do you require a valuation or no-obligation advice on buying, selling or renting a home in Tower Hamlets? Please contact our expert property team at City Realtor on 0207 790 7702 or email us at admin@cityrealtor.co.uk, and we will be delighted to help you.
Don’t forget to follow us on our socials for updates and new listings!
Follow us on Facebook, connect with us on X, join us on Instagram, find us on TikTok, see us on LinkedIn, watch our YouTube Videos!
Good luck if you are buying a home, or considering putting your property in Tower Hamlets on the market. We’ve answered your FAQ’s here.
Note: The information in this article is based on data as of February/March 2025 and may change. Always seek professional advice for specific circumstances.
