Average house prices in the UK are predicted to rise by 4% in 2025, with Wales being one of the areas set to see significant gains according to a report by Rightmove. The property market in 2025 is expected to favour buyers, with an abundance of homes coming onto the market and a potential decrease in mortgage rates, creating a buyer’s market in many regions. The availability of properties per estate agent branch is at its highest level in a decade, providing buyers with a wide selection to choose from.
Rightmove anticipates a total of around 1.15 million transactions in 2025, as the competition remains strong for sellers due to the high number of homes for sale. This is expected to prevent substantial price growth but will facilitate more agreed sales. The company foresees a 4% increase in the UK national average house price in 2025, signalling the largest prediction for price growth since 2021, in line with long-term trends.
Looking specifically at Wales, James Thomas, associate director at Savills Cardiff, noted a steady increase in prime residential property values, although not matching the growth rates of other UK regions. However, Savills projects a significant shift for Wales in the coming years, with the potential for 20.5% growth by 2029, outpacing other areas like Scotland.
In terms of mortgage rates, Rightmove expects the average five-year fixed and two-year fixed rates to reach around 4% by the end of 2025, lower than the current rates. This reduction is likely to enhance affordability and contribute to consumer confidence. The company also suggests that while rates may decrease further in 2026, they are not expected to return to historically low levels seen before.
While stamp duty rates in England are set to increase in April 2025, the Land Transaction Tax (LTT) in Wales for main residential properties is expected to remain unchanged. However, there will be a 1% increment in LTT for additional residential properties, generating an estimated £7 million in revenue for 2025-2026. The Welsh Government’s draft budget also includes provisions for affordable housing and digitalizing planning services.
Propertymark, a leading professional body in the real estate sector, expressed disappointment over the rise in LTT for additional properties in Wales but welcomed the allocation of funds for affordable and social housing. The budget proposes continued support for the Help to Buy Scheme in Wales, aimed at assisting first-time buyers and second steppers in purchasing new homes.
The draft budget is under scrutiny by Members of the Senedd, with a final vote scheduled for March 2025. The proposed measures reflect a strategic focus on enhancing the housing sector in Wales and supporting prospective homeowners. With the property market poised for growth and policy initiatives in place to stimulate demand, 2025 could be a pivotal year for the real estate landscape in Wales.
In conclusion, 2025 is projected to offer ample opportunities for buyers in the housing market, with Wales positioned for notable growth in property values. The convergence of increased supply, stable mortgage rates, and government support schemes sets the stage for a dynamic and competitive real estate environment in the year ahead.