2024 was a very good year for the London property market. As December comes to a close, there are many reasons to be optimistic about what lies ahead. Here's our take on what happened and what it means for you.
Key points (click for details):
• Mortgage rates are easing, but lenders aren't waiting around.
• Significant improvement in buyer sentiment.
• Stamp duty ends on April 1st
• Foxtons Sales performs well in London market
• The new year is going to be busy.
important numbers
If you're wondering about home prices (and who isn't?), we have good news. Property values are up 4.8% since this time last year, the strongest level since November 2022, according to the Halifax Home Price Index.
Lenders are getting creative.
Unique new rate reduction feature
99% home loan for first time buyers
But the real story of 2024 is the mortgage market.
Interest rates are also starting to fall as the base interest rate improves. It dropped to 5% in August 2024 and 4.75% in November. However, affordability remains a key issue and will continue to be so in 2025.
So we've been really impressed with how lenders are enhancing their strategies. They have added creativity to their products and made homeownership more accessible to first-time buyers and ambitious movers. This innovation will be critical as we head into 2025.
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New market realities
Remember the ultra-low base rates of the pandemic era? Five years ago they reached a historic 0.1%, which is frankly unthinkable now.
It was a transition period when interest rates started rising. Things were a bit volatile as buyers and sellers faced the market with different price expectations. But now we have all adapted well to the new normal. Buyers, sellers, agents, lenders – everyone’s expectations are now better aligned.
Why does that matter? Well, overall market sentiment is improving, with inflation subdued and wages rising*. This can help banks reduce adverse risk on mortgage applications, create a more active market, and give you the opportunity to achieve your real estate goals.
*Source: Wage growth rate – ONS
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Stamp duty: the clock is ticking
If you're considering a migration, there are some things you need to keep in mind. The current stamp duty relief that buyers have enjoyed until 2024 will end on 1 April 2025. Labor confirmed this in its autumn budget.
This creates clear deadlines for smart buyers and sellers to act, and a lot of competition for very good reasons.
London is coming back strong
London has never lost its charm – let's be clear about that. But we're seeing new energy with a return to offices and a new wave of international buyers showing interest. And speaking of strength…
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Foxtons take the lead
The last few years have been difficult for London. We all remember the Trusmini budget (although some may not want to see it), but for many, 2023 will mainly be about weathering the storm of weak market sentiment and rising inflation. It was the year. For us, it was all about getting it done.
Foxtons' sales team turned these challenges into opportunities. Despite London seeing some of its lowest sales volumes in recent history in 2023, we have become London's number one estate agent brand*. We have made further progress in a recovering and growing market in 2024. We're heading into 2025 stronger than ever and ready to get it done for our customers.
*Source: TwentyCI data, 2023 and 2022 market share and new instruction market share growth at brand level.
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Looking to the future: Why early 2025 is the moment
Read: Your new home is waiting on the New Year market
Here's some inside information. The beginning of the year is always busy in the real estate industry. People come back from Christmas with fresh motivation (perhaps spending a few hours after Christmas lunch scrolling through real estate websites). Traffic on our website for properties for sale and rentals typically spikes around the new year.
The first quarter is expected to be very active, especially as standard stamp duty rates return in April. First-time buyers may want to take advantage of current relief measures now. Your mover will give you a quote and you'll realize the savings you can make by acting quickly. And what about investors? They will develop strategies to expand their portfolios before interest rates begin to rise.
So if you're looking to sell or buy, don't wait. Early risers really catch the bug in the real estate market. With interest rates expected to fall and buyer sentiment increasing, early 2025 could be the best time to take action.
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Source: This article about the 2024 property sales market was reviewed and edited by Foxtons Sales. London real estate expert. For personalized advice tailored to your property goals, book a valuation with Foxtons Valuer.
