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Residential Property Specialist In 2025, the residential property market is adapting to a changing environment defined by evolving legislation, economic shifts, and an ever-growing focus on sustainability. Whether you are a first-time buyer, a seller, or an investor, being aware of these trends and changes is essential for a smooth transaction. Here are some of the main ones at a glance.
Stamp Duty Changes
On 1 April 2025, changes to Stamp Duty Land Tax (SDLT) thresholds came into effect, in most cases increasing the cost of purchasing residential property. Evidence suggests the surge in demand from buyers rushing to complete before the deadline has slowed the market as it adjusts to the changes.
House Prices
Despite affordability challenges, housing market activity proved resilient through 2024, with the average house price in England increasing by £13,000 (4.8%). Lower growth is expected in 2025, with most industry commentators predicting an increase of between 2% and 4%.
Energy Efficiency Standards
Energy efficiency remains a government priority. As a result, properties not meeting Energy Performance Certificate (EPC) ratings are facing increasing market challenges. With buyers now more conscious of energy costs, properties with lower EPC ratings will likely require remedial work to maintain value and retain buyer interest.
Mortgage Affordability
The Bank of England has recently maintained the base rate at 4.5% following a reduction in February. Financial markets had anticipated gradual cuts later in the year, with mortgage rates projected to stabilise at just over 4%. However, with an international trade war now threatening UK economic growth, many senior economists are calling on the Bank of England to consider deeper cuts to the cost of borrowing to boost confidence and head off an economic downturn. These are cautiously positive indicators for prospective homebuyers who may have been hesitant due to higher rates in the recent past. Improved affordability, coupled with potentially increased competition among lenders, could lead to a more accessible housing market.
Leasehold Reforms
The Leasehold and Freehold Reform Act 2024 has introduced substantial changes for leasehold properties. Notable reforms include cheaper lease extensions, extending lease terms to a maximum of 990 years, and abolishing the contentious “marriage value”. While these simplify matters for leaseholders, navigating property transactions involving leaseholds requires greater diligence to account for these new regulations.