2024 Year in Review: The Local Housing Market and Predictions for 2025

2024 Year in Review: The Local Housing Market and Predictions for 2025

As the year draws to a close, we’ve been reflecting on what has been a challenging yet intriguing year for the housing market in Bishop’s Stortford and the surrounding areas. The figures from 1st January to 30th November 2024 highlight some key trends:

• Sales Agreed: 736 sales agreed, averaging 67 per month.
• New Instructions: 1,109 properties listed, averaging 101 per month.
• Price Reductions: 655 reductions, averaging 60 per month, with an average reduction amount of 4.6%.

These figures show that while the market remained active, pricing strategies and market conditions played a significant role in shaping outcomes for both buyers and sellers.

Challenges of 2024

This year, the housing market contended with several economic and political shifts:

1. Bank of England Interest Rates:
   The base rate peaked at 5.25%—the highest since 2008—putting pressure on mortgage affordability. However, we’ve seen positive news in recent months, with rates falling twice (to 4.75% by November). This reduction brought some relief to buyers, with lenders starting to reduce their mortgage rates.

2. Political Changes:
   The general election in May brought Labour into government, creating initial uncertainty. Their first budget in the autumn revealed notable changes to Stamp Duty Land Tax (SDLT):

   • Stamp duty thresholds will revert to pre-pandemic levels from 1st April 2025.
   • First-time buyers face reduced relief, with no SDLT payable up to £300,000 (down from £425,000).
   • For those purchasing homes between £425,000 and £625,000, the change will mean paying an additional £6,250.
   • Move-up buyers will see a 2% increase on the portion of their purchase price between £125,000 and £250,000.
   • Investors face higher costs, with an increase in the additional property SDLT rate from 3% to 5%.

These changes could significantly alter buyer and seller behaviour, particularly in the first quarter of 2025 as people rush to complete transactions before the new thresholds take effect.

3. Economic Pressure on the Market:
   Affordability challenges, along with rising costs of living, forced many sellers to reduce asking prices to secure sales. Despite this, CM23 saw strong activity in the latter half of the year, suggesting resilience in the market.

Market Trends and Positives

November 2024 proved to be one of the strongest months for sales in CM23, with 79 sales agreed compared to just 50 in November 2023. This uptick was driven by:

• The recent drop in interest rates, leading to lower mortgage costs.
• Buyers looking to secure properties ahead of the April 2025 stamp duty changes.

Predictions for 2025

Looking ahead, we remain cautiously optimistic about 2025:

• Interest Rates: Many experts predict further interest rate cuts, which should stabilise mortgage rates and improve affordability for buyers.
• Market Confidence: Now that Labour’s government and first budget are in place, many homeowners and buyers are feeling more confident about making their moves. We expect a rise in transactions in the New Year, as people who’ve been waiting for stability finally re-enter the market.
• First-Time Buyers: The increase in SDLT for investors could make the market more accessible to first-time buyers, reducing competition for smaller properties.

While affordability will remain a challenge for some, we believe that the combination of improved mortgage rates, pent-up demand, and the seasonal momentum of the New Year will lead to a vibrant market in the months ahead.

What This Means for Buyers and Sellers

For sellers, early 2025 is an ideal time to refresh your marketing strategy. With more buyers expected to enter the market, presenting your property in the best possible light will be crucial. For buyers, the window between now and April offers a chance to secure properties before the stamp duty changes increase costs.

At Willmott & Lake, we’re here to help guide you through these market changes with expert advice and tailored strategies to achieve your property goals. Whether you're looking to sell or find your dream home, we’d love to assist you in the coming year.

Here’s to a positive 2025 for the housing market in Bishop’s Stortford! If you have any questions or need advice, don’t hesitate to get in touch with our team.