South ‘To See Lower House Price Inflation In 2025’

With a new year upon us, all sorts of forecasts are being made about various aspects of the economy, not least the property market. If you are looking to buy a home in Hounslow or any other part of London, the latest Zoopla House Price survey may bring some encouraging news on this front.

As well as reviewing the housing market in 2024, which has recovered somewhat since 2023, it also made some forecasts for 2025. One of these is the heartening news for buyers concerned about house price inflation that this should not only be low but will increase by less in more expensive southern regions of the UK such as London.

Overall, the survey stated, house prices rose by an average of 1.9 per cent across the UK as a whole, but will increase to 2.5 per cent in 2025. This increase will be constrained by affordability issues and it is this that will ensure price inflation is more modest in areas where prices are higher to start with.

Analysing the longer-term trends, Zoopla noted that since 2010, prices have risen by 83 per cent in London and 70 per cent in other parts of southern England, whereas by contrast, they have only grown by 41 per cent in northern England.

While this was exceeded by Wales (56 per cent), Scotland has seen prices rise by only 30 per cent and Northern Ireland by a mere 19 per cent.

Of course, these forecasts are not bullet-proof and may turn out to be wrong in either direction. Stronger economic growth may inflate the market. Equally, given the weakness of the economy over the summer, Zoopla may be right in thinking price increases will be low and buyers will stay “price sensitive”.

A factor to watch will be mortgage rates, which Zoopla expects to remain static. A key factor in that will be the Bank of England’s monetary policy.

Easing inflation brought two base rate cuts in 2024, but with the Consumer Prices Index ticking upwards again, the Monetary Policy Committee has held back from further loosening in its latest meetings.