Chestertons Property Market Forecast 2025

Chestertons’ latest property market forecast aims to answer that all important question “What will happen to property prices next year?”.

Including:

• Price Predictions: UK property prices are expected to grow gradually in 2025, with a projected increase of 3.4% nationwide, 3% in London and 3.5% in Prime Central London. While rapid price increases are not expected, improved affordability and market confidence should support steady price property growth over the next three years.

• Rental Growth: London’s rental market is expected to see a modest 1.5% increase in 2025, which is slightly below the inflation rate. Smaller centrally-located properties with good public transport links are expected to remain in high demand and may potentially see higher higher rent increases.

• Stamp Duty Changes: The higher stamp duty rates for buyers of second homes and buy-to-let properties announced in October’s budget will reduce investor demand. However, this may create opportunities for first-time buyers to enter the market.

• First Time Buyers: From 1st April 2025, the threshold at which first-time buyers will start paying stamp duty will decrease from £425,000 to £300,000 and the maximum property price for First-Time Buyers Relief (a reduced stamp duty rate) to apply will decrease from £625,000 to £500,000.

• Policy Changes: A stronger pound and the removal of the non-dom tax regime could reduce demand from overseas buyers, which will have a disproportionate effect on the property market in Prime Central London.