Hello Readers,
Every year brings its share of surprises, doesn’t it? As we step into 2025, the landscape of property investment and financial services feels as unpredictable as ever. Reflecting on last year, the housing market showed resilience yet again, leaving many of us both surprised and intrigued.
Here’s a thought-provoking question: will the trends from 2024 carry on, or will we encounter a fresh wave of unexpected changes? Let’s dive into some key predictions, shall we?
Interest Rates: Will the Bank of England Hit Pause?
Financial services experts are nearly unanimous in their plea for the Bank of England to hold its current rates. With the next Monetary Policy Committee (MPC) meeting imminent, the consensus is clear: let’s not rock the boat. Stability is the name of the game.
Rising Rents: A Continuing Trend
In the south-east of England, rents are predicted to rise by 4% this year, outpacing the national average of 3.5%. It’s a classic case of supply and demand—constrained stock meets ever-growing rental needs.
Landlords, of course, stand to benefit, but as rents climb, one wonders: how much higher can they go before tenants start to feel the pinch?
Stamp Duty Shake-Ups and Their Impact
The recent increase in the additional stamp duty surcharge for second homes, from 3% to 5%, was designed to ease first-time buyers into the market. However, it’s likely to constrain rental stock further, driving rents even higher.
While some landlords may grumble about the added costs, savvy investors know it’s all part of the game.
Renters’ Rights and Section 21
The much-discussed Renters' Reform Bill, including the removal of Section 21 (no-fault evictions), has been given a fresh lease on life under the new Labour government. With the bill at the report stage, we may finally see it pass into law this year.
Will this protect tenants as intended, or will it backfire by further reducing available rental properties? Time will tell.
Predictions for 2025
Here’s what we might expect:
House prices: A modest rise of 2–2.5%
Mortgage rates: A gradual dip towards 4% by December
Rental increases: A steady climb, particularly in the south-east
Yet, as always, the property market has a knack for defying expectations.
Final Thoughts
If there’s one lesson from 2024, it’s this: resilience is the hallmark of the UK housing market. As 2025 unfolds, we’ll undoubtedly encounter surprises, but that’s what makes this industry so captivating, isn’t it?
Stay tuned, stay informed, and here’s to another year of navigating the unpredictable waters of property investment!
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