Property market snapshot: Will policy changes shake the market?

More information:

• What is the outlook for the residential market?

  The prospect of further cuts in interest rates should start to widen the pool of buyers in the mainstream housing market. Across the country as a whole, and across all types of property, we think prices will rise by around 4% next year.

  In prime markets, we have some further challenges. In central London, for example, taxation of non-doms and the additional 2% stamp duty levy for people buying additional homes might not just affect the central London market but also some of the second-hand markets we deal with. In those circumstances, prime markets will probably underperform mainstream markets when at this point in the cycle they would normally be expected to outperform. 

• What is the outlook for the rental market?

  In the buy-to-let market, we have higher entry costs because of the 2% stamp duty surcharge and significant rental reform. The Renters’ Rights Bill will do away with Assured Shorthold Tenancy agreements. Landlords will still have the right to recover possession of their properties if they want to sell, for example. But the changed regulatory environment is likely to mean we continue to see constraints on the stock available in the rental market.

  In terms of who buys, the market is likely to become even more weighted to the larger, wealthier private landlord. As the availability of rental properties becomes more limited, rents are predicted to grow by 4% nationally in 2025, and 2.5% in London. 

• Is now a good time to buy?

  The best time to buy in a market is before any of the projected growth is priced in. According to the RICS survey, we saw an increase in new buyer enquiries and new instructions in late 2024. Going forward, activity is likely to increase further as some buyers seek to complete before changes to stamp duty thresholds are introduced in March 2025.

  As we start to formulate plans, 2025 is probably going to be a good time to be a buyer. Some markets will be more price sensitive than others, so I think any buyer will have to watch changing market conditions very closely.