New data from Zoopla has revealed that the housing market has made the strongest start in three years.
New sales agreed have increased by 12% year-on-year as Zoopla says some buyers attempt to avoid the higher stamp duty rate set to be introduced in April.
The number of homes for sale has also increased, with 10% more properties on the market than the previous year. As a result, 2025 has the highest number of homes for sale per estate agency branch for seven years with 31.
The higher number of sellers has also resulted in a higher number of potential buyers, with demand for homes up 14% year-on-year.
The Zoopla report also found that house price inflation has risen by 0.9% year-on-year to 2%, which is the highest level of growth since April 2023. The average house price now stands at £267,700, up £5,200 on the previous year.
On a regional level, house prices have returned to growth with prices rising at the highest rate in more affordable areas that are experiencing higher-than-average growth in job availability.
Northern Ireland has seen the fastest growth in house prices at 7.7% year-on-year, followed by the North West of England with 3.2% year-on-year.
The south of England is experiencing slower price rises where it is taking longer for rising incomes to meet the above-average house prices. London, the South West, South East and East of England have all seen house prices rise by less than 1.5%.
With the news that the stamp duty temporary relief will come to an end this April, demand amongst first-time buyers rose by a third for houses priced between £300,000 and £625,000 towards the end of 2024.
Zoopla’s Monthly Consumer Tracker shows that there has been a rise in the number of renters looking to buy, with the increase partly due to many households staying put while mortgage rates rose to higher levels in recent years.
Over a fifth of renters are now looking to buy as rent prices have risen sharply, and will make up a large proportion of the first-time buyer market which will once again be the largest buyer group this year.
Just under a fifth of homeowners want to move in the next two years while a quarter have no immediate plans to move and are keeping a close watch on the market should circumstances change.
Richard Donnell, executive director at Zoopla, said: “The first few weeks of each year tend to provide a clear indication of how the rest of the year is likely to unfold. 2025 has started well, better than 2024 and 2023 which bodes well for market activity over the rest of the year, supported by evidence of more people looking to move.”
“It is important not to read too much into the increase in stamp duty for more buyers from April as three in five first-time buyers will still pay nothing from April. The extra costs to homeowners remain manageable and unlikely to reduce sales but they will keep price rises in check.”
“The healthy stock of homes for sale will keep price rises in check and we are forecasting average UK house prices will rise by 2.5% in 2025 with 5% more sales than last year at 1.15m. Rising incomes and base rate cuts will improve affordability and support consumer sentiment.”
