Charters Market Update – February 2025

28th February 2025

We are pleased to share our second market report for the year. It has been a busy start but based on real hard work.

February Headlines

The Bank of England has cut interest rates from 4.75% to 4.5% – the lowest base rate since June 2023.
Monthly GDP is estimated to have grown by 0.4% in December 2024, following growth of 0.1% in November (ONS).
CPI inflation rose by 3.0% in the 12 months to January 2025, up from 2.5% in December (ONS).
The average house price rose to £268,087 in December, a 4.6% year-on-year increase (ONS).
The average price of property coming to market rose by 0..5% this month to £367,994, a more muted rise than is usual for this time of year (Rightmove).
UK house prices are projected to rise by 2.5% in 2025 (Zoopla).
There were 96,330 transactions in December, a 18.7% rise compared to a year earlier (HMRC).
The number of sales being agreed is up by 11% compared to last year (Rightmove).
There were 66,526 mortgage approvals in December which is 28% higher than a year ago (Bank of England).
Home buyer demand is up 13% on this time last year (Zoopla).
Average void periods lengthened from 21 days in December to 24 days in January (Goodlord)
Rents for new lets are forecast to increase by 4% over 2025 (Hometrack).
The average rent in January was £1,271, 1.0% lower than December and 0.9% higher year on year (HomeLet).

South East Prices

The South East was the willing participant in the rush to the country from London and saw some of the biggest price rises along with low interest rates, stamp duty holidays and the last vestiges of Help to Buy. Fast forward to 2024/2025 with higher interest rates, punitive stamp duty, cost of living and the rush back to work in the capital has resulted in an assault on prices through 2024. In addition to this, we are still seeing a reduced amount of people moving house and we think people will just move less often.

First time Buyers

The number of first-time buyers is up +19% in 2024 vs 2023.

New buyers putting down a £61,090 deposit, on average.
The typical cost of a first home is now £311,034.
The average first-time buyer is 33 years old, two years older than a decade ago.
The number of first-time buyers stepping onto the property ladder rose to 341,068 last year, up 19% compared to 2023.
According to the latest analysis from Halifax, first-time buyers made up over half (54%) of all home purchases made with a mortgage last year, the biggest majority on record.
The average first-time buyer in 2024 was 33 years old, two years older than ten years ago (31 years old) and the oldest in two decades. They put down an average deposit of £61,090 and typically paid £311,034 for their first home.
Many buying their first home are doing so ‘coupled up’ – almost two-thirds (62%) of mortgage completions last year were in two or more names. However, 38% of buyers started on the property ladder on their own, a 1pp increase from 2023.
Across the UK, all regions and nations saw growth in the number of buyers getting on the housing ladder. East Anglia and the South West experienced the largest increases, with +22% more first-time buyers than in 2023.

Amanda Bryden, Head of Mortgages, Halifax said:

“Last year saw a big increase in the number of first-time buyers, up almost a fifth from 2023. This likely reflects an improvement in mortgage affordability, as interest rates eased and stabilised, providing more certainty for those stepping onto the ladder. “Many are still teaming up to make the numbers work, with most buying homes jointly. This makes sense given the average deposit of £61,090 and an average starter home price of £311,034, which can be a stretch for those with a single income. It’s not surprising the average first-time buyer is now 33 years old, the oldest in the last two decades.

“Despite the challenges of saving for a deposit and rising house prices – up 8% in 2024 – it’s encouraging that first-time buyers still account for more than half of all new mortgages, the biggest majority ever recorded.”

First time buyers’ affordability

Average property values for first-time buyers are now around 6.6 times the average UK salary (£46,970), so it’s no surprise that most new buyers are purchasing in joint names rather than by themselves.

The most affordable place to buy a first home in the country is in the North of England, with County Durham topping the list. Using the comparison of the average earnings in County Durham in the North East (£39,245) to the average first-time buyer property price in the area (£142,248) those getting started on the property ladder need to borrow roughly 3.6 times the average salary.

The least affordable areas in the country are in London and the South East. First-time buyers in Hammersmith and Fulham face average house prices (£622,115) of more than 10 times the average salary (£64,646).

If you have any questions, please don’t hesitate to contact us.

Spread the news...