2024 Housing Market Wrap-Up and a Look Ahead to 2025

The political landscape of 2024 has had a profound impact on the housing market, with Labour’s general election victory introducing significant changes that directly affect both landlords and sellers. These shifts have reshaped client priorities and influenced the property market in multiple ways.

Interest rates and mortgage affordability have remained top concerns for sellers throughout 2024. The Bank of England’s efforts to manage inflation have resulted in fluctuating mortgage rates, impacting buyer behaviour and pricing strategies.

The year began with ongoing uncertainty around interest rates, with the Bank of England implementing several rate hikes to tackle inflation. These decisions have significantly influenced the housing market, particularly for first-time buyers and those seeking to remortgage. Rising borrowing costs have prompted many potential buyers to rethink their options, leading to more caution when making financial commitments.

Despite these challenges, the housing market has shown impressive resilience. Property prices have largely remained stable, especially in high-demand areas with limited housing supply. More affordable housing markets performed particularly well. This is largely due to factors such as the increasing demand for larger homes and a growing interest in suburban and rural locations, where flexible working arrangements are encouraging people to reassess their living situations.

The housing market is expected to continue evolving in 2025, influenced by a mix of economic, social, and political factors.

While interest rates may not significantly drop in the short term, there is hope that the current hikes will stabilise, offering more certainty to both buyers and sellers. However, inflation is likely to continue affecting affordability, particularly for first-time buyers who are also facing rising stamp duty costs. As we progress through 2025, there is likely to be cautious optimism regarding rate movements.

A key focus for the Labour government will be increasing housing supply and improving affordability. We can expect new initiatives aimed at supporting first-time buyers and addressing the ongoing housing crisis, including increased incentives for developers to build homes in key areas.

The introduction of the Renters' Rights Act has been a major development this year, bringing substantial changes to the private rental sector. Key provisions, such as the abolition of Section 21 “no-fault” evictions, require landlords to reassess their tenancy management strategies. At Comfort Estates, we’ve been working closely with our landlord clients to ensure they are prepared for these changes, providing guidance and solutions to navigate the new landscape effectively.

In 2025 the Renters' Rights Act will remain a central focus, but attention will also need to turn to the upcoming changes to minimum EPC ratings. Under Labour’s new plans, properties will need to achieve a minimum rating of C by 2030. Landlords should start preparing for these changes to ensure compliance.

For further insights, we’ve written a detailed article on the Renters' Rights Act, which you can read here.