January has demonstrated the resilience of the market after modest growth.
This growth was primarily concentrated in the latter half of the year, driven by declining mortgage rates and wage growth, which improved affordability, and by a boost buyer confidence.
The reduction in mortgage rates, some reaching their lowest levels in 15 months, has been a significant factor in revitalizing buyer interest. This decline has led to significant increase in new buyers being registered, viewings booked, and indeed sales agreed, compared to January 2024.
Additionally, mortgage approvals have risen above pre-pandemic levels, indicating a sustained recovery in market activity.
Looking ahead, we anticipate modest house price growth in 2025 of perhaps 3-4%. This projection is supported by expectations of further reductions in mortgage rates and continued income growth, which are likely to enhance affordability and sustain buyer demand.
However, the changes to the stamp duty levels in April may influence market dynamics, with many first time buyers already having bought to save thousands of pounds.
In summary : As of January 30th the West Midlands housing market has experienced notable trends in property prices and sales volumes.
Property Prices:
- The average property price in the West Midlands is £281,321, reflecting a 4.1% increase from the previous year.
- Detached houses average £455,264, semi-detached £257,931, terraced £211,025, and flats £153,160.
Market Dynamics:
- The impending stamp duty changes effective April 1, 2025, are expected to influence buyer behavior, potentially leading to a surge in transactions before the deadline.
- The anticipated stamp duty changes may lead to a temporary increase in market activity as buyers aim to complete purchases before the new rates take effect.
Buyer Activity:
- First-time buyers, often supported by family contributions, remain active in the market.
Rentals :
- The rental sector is experiencing high demand, with landlords facing challenges such as increased mortgage rates and regulatory changes, prompting some to sell properties.
Outlook:
- Experts predict modest growth in house prices for 2025, with regions like the Midlands potentially outperforming the UK average, forecasting a 2.5% annual increase.
Mortgage Rates and Affordability :
Mortgage rates are projected to remain above 5% throughout 2025. This sustained elevation in rates may continue to challenge affordability for some potential buyers.
General market forecasts :
Existing home sales are anticipated to rise by 9% year-over-year, with new home sales projected to increase by 11%.
Conclusion :
In summary, the 2025 housing market is projected to experience modest growth in home prices and sales. Prospective buyers and sellers should closely monitor local market conditions and mortgage rate trends to make informed decisions. For expert advice please contact any of our local offices.
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Thank you for reading this article, and your interest in Acres and our property for sale.
Nigel & Jayne Deekes – Acres Partners
