Are you looking to save for a deposit next year, and hoping for the UK housing market to crash to a more affordable level? Well, you’re not alone, and you might like to find out what key trends are predicted for this year. All markets have been defying gravity in recent years and despite a lot of changes, price predictions can often be wrong but here are some of the key trends we believe will play out over the coming months. With new economic factors, changing work habits, and growing interest in sustainability, there are several key trends to watch for both buyers and sellers - here’s a few to keep in mind:

Interest Rates and Mortgage Impacts

In 2025, experts predict rates will remain relatively steady, but slight increases could still be possible. For prospective homeowners, this could mean higher monthly payments. According to Fidelity International, a behemoth in the asset management industry, the forecast for interest rates is expected to reduce to around 4% by the end of 2025, which could make a difference in how much buyers are able to pay for their new properties.

Remote Working Reshapes Housing Demand

Remote working isn’t just a passing trend—it’s here to stay. As many companies adopt hybrid or fully remote models, people are looking beyond expensive cities to find homes in quieter, more affordable areas. For example, an article by The Home Office Life shows that areas like Liverpool and parts of Yorkshire are increasingly popular with remote workers, due to the tranquillity and price difference compared to areas such as London. For those searching for a new home in 2025, it might be worth exploring less traditional areas that offer both good value and proximity cities without the increased price tag.

Remote working

Eco-Friendly Homes on the Rise

Sustainability is a major trend in 2025, and it’s having a noticeable impact on the housing market. More buyers are prioritising energy-efficient homes. Government incentives, like the Green Homes Grant, continue to encourage homeowners to make their properties more eco-friendly with features like solar panels, insulation, and energy-efficient appliances.

Eco-Friendly Home

Regional Housing Markets Are Diverging

While London and the Southeast have traditionally been at the centre of the UK housing market, regional markets are now experiencing some exciting changes. Cities like Manchester, Birmingham, and Bristol are growing in popularity, with property prices rising steadily to match. For example, house prices in Manchester have seen a 6% increase year-on-year, making it one of the top cities for property price growth. On the other hand, parts of London are seeing the value of properties stagnate due to high property prices, affordability concerns and people moving out of the city. Buyers and investors should take regional differences into account when making decisions in 2025. For more insights on how these areas are performing and the more expensive purchase areas for the UK, check out one of our earlier posts 'Most expensive house price locations in the UK’.

Rental Market Challenges

The UK rental market remains a strong sector in 2025, driven by demand from people unable to purchase homes due to rising prices. The latest figures from the Guild of Residential Landlords show that rents in the UK have increased by an average of 5.2% in the last year. At the same time, the government is introducing new measures like the Renters Reform Bill, which could affect how landlords manage properties. Renters and landlords will need to stay informed on these changes to navigate the changing rental world.

A key issue that plays into a lot of these trends is a lack of supply due to planning constraints and the government’s inability to create an environment that supports housebuilders to hit construction targets. We’ll explore this in a later blog when hopefully we will have heard a clear plan from Rachel Reeves that lays out how we will confront this challenge moving forward.