As a new year begins, it is a good time to think about what lies ahead for the housing market.
After several years of strong rental growth, the pace slowed at the end of 2024 and that trend is forecast to continue.
Earnings, a key driver of rents, are also expected to grow at a more moderate pace over the next few years. By the end of 2024, annual house price growth had reached 3.7% and the market looks set for another solid year in 2025.
Affordability is always central to the outlook for house prices and further interest rate cuts in 2025 will help improve this further. But the mixed economic outlook means there is currently limited impetus to drive price growth much higher than these forecasts.
A stable price environment will allow for more transaction volumes - transaction activity, like 2024, will be much improved on the low levels evident in 2023. Source: Dataloft by PriceHubble, consensus across several real estate consultancies
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