Spring 2025 Mortgage & Property Market Update

The mortgage and property market in 2025 is shaping up with some key trends, including lower interest rates, shifting house prices, and tax changes. Whether you’re a first-time buyer, looking to move, remortgage, or you’re a landlord, here’s what you need to know.

1. Interest Rates & Mortgage Deals

  • Bank of England Base Rate dropped to 4.5% in February 2025. More reductions are expected throughout the year.
  • Mortgage rates have been fluctuating, but fixed-rate deals starting with a “4” may be available, particularly for buyers with a 60% loan-to-value ratio.
  • An 11% growth in mortgage lending is predicted in 2025, creating more borrowing opportunities.

2. Property Market Trends

  • UK house prices have grown 4.1% annually, with predictions of a 2-4% rise in 2025.
  • 1.8 million fixed-rate mortgage deals will expire this year, meaning many homeowners will be looking for new deals.

3. Tax & Stamp Duty Changes – Act Before April 2025!

  • Stamp Duty Relief for First-Time Buyers ends on 31 March 2025. For example:
    • Buying at £425,000? £0 Stamp Duty before April; £6,250 after.
    • Buying at £625,000? £10,000 tax before April; £21,250 after.
  • Landlords face a 3% to 5% Stamp Duty increase, making buy-to-let investments more expensive.
  • Capital Gains Tax on shares and property sales has increased, impacting investors.
  • Inheritance Tax thresholds remain frozen until 2030, meaning more estates will be taxed.

4. Protection & Insurance – Why It Matters

  • 97.4% of all protection insurance claims were paid out in 2023, offering financial security in uncertain times.
  • Life cover, critical illness, and income protection policies could help homeowners safeguard their investments.

5. First-Time Buyers – The Road Ahead

  • The average deposit for first-time buyers has risen to £61,090 (19.6% of purchase price).
  • Some buyers are clubbing together to afford homes or receiving financial support from family.
  • Loan-to-income ratios have increased, with some mortgages offering 5.5 to 6 times salary borrowing.

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