Early signs in 2025 suggest the housing market remains steady despite earlier worries over Trump tariffs and rising borrowing costs. Yet, according to Knight Frank, the question is whether that stability will continue through the spring season.
Tom Bill, who leads UK residential research at Knight Frank, pointed out that pressures are building, and employers are preparing for higher national insurance contributions and increases in the minimum wage. “The question now is whether the Spring market will blossom in the normal way”, Bill remarked.
He further states that while these financial pressures are looming, the Bank of England seems increasingly willing to balance growth with inflation management. In support of this, the government recently reappointed Swati Dhingra to the monetary policy committee – a figure known for backing more aggressive interest rate cuts.
Bill described this move as potentially beneficial for buyers, provided inflation remains close to the bank’s 2% goal.
He goes on to say that another date drawing attention is 26 March, when the Chancellor will present the spring statement. According to Bill, this will be a pivotal moment for the housing sector, where measures that offer financial relief could ease borrowing costs and encourage demand, but tax increases could dampen buyer confidence.
Bill highlights that projections for house prices and inflation also seem to point to a modest, stable picture by year-end, and anticipates UK house prices to rise by 2.5% in 2025, while the Office for National Statistics expects inflation to average around 2.6%.
“If both figures started with a ‘2’ at the end of the year, it would be reassuringly unexciting”, Bill summed up.
Reference: Estate Agent Today
