UK House Prices Experience Significant New Year Surge
In January 2025, UK house prices increased by nearly £6,000, marking the largest new year rise since 2020, according to Rightmove. The average asking price now stands at £366,189, though this remains £8,942 below the record high set in May 2024. Rightmove forecasts a 4% increase in average asking prices for the year. Contributing factors include uncertainty about interest rate cuts and the upcoming reduction of the stamp duty threshold for first-time buyers from £425,000 to £300,000, effective April 1, 2025. This change is expected to impact the first-time buyer sector, particularly in higher-priced areas. Both the number of new properties on the market and the volume of buyers have risen compared to the previous year. However, high mortgage rates continue to be a concern, with elevated borrowing costs persisting. Sellers may need to price homes competitively to attract buyers in this environment.
Scotland’s Property Market Sees Record High Rents
Scotland’s rental market has reached new highs, with average rents climbing 8.6% year-on-year to £812 per month, as reported by the Scottish Property Federation. Urban areas like Edinburgh and Glasgow have experienced even sharper increases, with rental prices exceeding £1000 per month for one-bedroom apartments. A shortage of rental properties, coupled with growing demand from young professionals and families, is driving the surge. New regulations, including a rent freeze and eviction ban introduced during the pandemic, have led to some landlords exiting the market. These policy changes have exacerbated the supply shortage. Property experts warn that without new incentives for landlords or an increase in housing stock, rental prices will continue to rise, further burdening tenants.
Government Incentives for Eco-Friendly Properties Gain Momentum in Wales
The Welsh Government has introduced new incentives for landlords to make properties more energy-efficient. Under the Green Homes Grant expansion, landlords can receive up to £10,000 to upgrade insulation, install heat pumps, or implement solar energy systems. The initiative aims to improve the energy performance of rental homes, aligning with Wales’s goal of net-zero emissions by 2050. This comes as new regulations require rental properties to meet a minimum Energy Performance Certificate (EPC) rating of C by 2028. Non-compliance may lead to fines of up to £5,000. Landlords are encouraged to take advantage of these grants to future-proof their properties and reduce tenant energy costs. The scheme has been praised for promoting sustainability, though some critics argue it does not address challenges faced by smaller landlords who may struggle with upfront costs.
Irish House Values Expected to Grow Slower in 2025
In 2024, Ireland’s property market experienced significant price increases due to demand outpacing supply, population growth, high employment, and the appeal of suburban living facilitated by remote work. Nationwide, house prices rose by an average of 10.3%, surpassing the expected 4.9%. New developments remain insufficient to meet demand, with transactions largely static. Higher household incomes and equity have enabled buyers to compete at higher levels. Estate agents predict a slightly slower price increase of 7% for 2025 due to continued supply constraints. Additionally, a decrease in second-hand homes entering the market has exacerbated the issue, particularly impacting first-time buyers and those looking to move within the market.
Northern Irelands Sewage Crisis Impacts Housing Construction
Northern Ireland is facing a severe housing crisis, worsened by a critical shortage in wastewater infrastructure. This issue has left 30 new social homes in Dungannon unoccupied for nearly a year. The region’s water utility, NI Water, has been financially strained and unable to fund necessary infrastructure upgrades since its inception in 2007. This bottleneck has caused housing construction to plummet to a 65-year low and driven up house prices at the fastest rate in the UK, with home builds falling far short of targets. Consequently, 19,000 homes across 23 towns are delayed, with a substantial number of people waiting for social housing. Funding cuts and financial constraints from Stormont, which depends on UK government funds, have worsened the situation. The crisis also affects business investments, with companies relocating elsewhere. Despite receiving additional funding, the gap between needs and available resources remains significant, and the introduction of domestic water charges has been ruled out. Property prices continue to rise due to the mismatch between supply and demand.
Surge in Luxury Country Home Sales in Ireland
The prime country homes market in Ireland experienced an unprecedented surge in transactions during the first half of 2023, recording its highest volumes since data collection began in 2010, according to a report by Savills Ireland. Prime country home transactions reached €105 million, marking an 8.7% year-on-year increase. Kildare led with 14.8% of the sales, followed by Wicklow at 14.5% and Cork at 11.2%. Notably, 31% of the buyers were international, with strong representation from the UK and the US. Cash buyers dominated, accounting for 69% of transactions. The report highlights a trend of buyers seeking properties with expansive land for eco-conscious projects like rewilding. Despite substantial activity, limited supply, especially of modernized properties, ensures that this segment remains highly sought after. Both domestic and international demand are expected to keep the market buoyant into 2024.