Promising Start to 2025 for the South East Property Market, but Challenges Remain

The property market in the South East has started 2025 on a positive note, with a record number of sellers bringing homes to market since Boxing Day. The average asking price for properties in the UK has risen by 1.7% (+£5,992) this month to £366,189—the largest January price increase since 2020. While this reflects renewed confidence among sellers, prices remain nearly £9,000 below the peak seen in May 2024, highlighting ongoing affordability constraints for buyers.

Increased Choice for Buyers

For those looking to buy in the South East, there is more choice than ever. The number of new properties coming to market is up 11% compared to this time last year, giving buyers the highest level of selection at the start of the year since 2015. In addition, the number of buyer enquiries has risen 9% year-on-year, and sales agreed have increased by 11%, suggesting that many are eager to move despite economic uncertainties.

Mortgage Trends and Buyer Demand

Encouragingly, Rightmove has reported its busiest-ever start to the year for Mortgage in Principle applications, which indicates strong buyer intent. However, mortgage rates remain relatively high, preventing a significant improvement in affordability. The average five-year fixed mortgage rate currently stands at 4.75%, compared to 4.78% at this time last year, while the two-year fixed rate has slightly improved to 4.97% from 5.08%.

Market Challenges and Uncertainties

Despite this promising start, challenges remain. The pace and scale of potential interest rate cuts in 2025 remain uncertain (although we have just seen the BoE base rate drop to 4.5% today), which may affect buyer confidence. Additionally, the upcoming stamp duty deadline on 31st March could impact movers, particularly those looking to buy in the South East, where house prices are typically higher. From 1st April, first-time buyers purchasing homes above £300,000 will face increased stamp duty charges, potentially slowing activity in the lower end of the market unless further government support is introduced.

What This Means for Buyers and Sellers

For sellers, the high level of buyer interest is encouraging, but competition remains strong. Overpriced properties may struggle to attract offers, making realistic pricing key to securing a sale. For buyers, now could be an opportune time to move, with an increased number of homes available and mortgage rates stabilising.

If you’re thinking about buying or selling in 2025, our team at Homes Partnership is here to help. Get in touch today for expert advice and a free valuation.