Revealed: Britain’s 2025 house price hotspot map – and what Labour could do to the value of YOUR home

This was supposed to be the year that the property market finally got its mojo back.

Things were looking up for 2025. A series of interest rate cuts were on the cards, set to bring relief to millions of mortgage holders.

And the rising cost of living – which relentlessly pushed up prices on everything from bills to holidays – looked as if it was cooling to a manageable level.

Estate agents were hopeful that buyers who had been waiting on the sidelines until they had greater certainty over their finances and mortgage rates, as well as the political situation after the General Election and Budget, would finally get stuck in.

But just three weeks into the new year and some of the optimism is already fading. Property experts are still expecting house price growth overall, but perhaps more muted – and not all regions will benefit.

So what has gone wrong and how will it affect the property market?

Low expectations: Property experts overall are going into the year expecting a smidge of house price growth

Money Mail has spoken to agents up and down the country – as well as the UK’s top property data crunchers – to find out what is really happening on the ground and which regions are most likely to see the greatest price growth.

Plus, for those planning to sell this year, we investigate the must-have features that buyers are insisting on to part with their cash.

What do experts predict?

Property experts overall are going into the year expecting a smidge of house price growth. Nothing to get too excited about, but growth nonetheless. 

Property website Zoopla and estate agency Knight Frank are predicting 2.5 per cent growth, for example, while property website Rightmove and estate agency Savills are expecting 4 per cent growth.

However, all are crystal clear that their predictions are based on one key component: affordability. Put simply, buyers can only stump up for their next home if they can afford to do it.

But if their incomes are eaten away at by high interest rates and rising household bills, they will put off taking their first step on to the property ladder or trading up to their next home. 

Conversely, if households feel wealthier this year, that should inject some much-needed energy into the property market.

As Lucian Cook, head of residential research at Savills, puts it: ‘If interest rates fall and affordability improves, that would lead to both a wider pool of buyers in the market, as well as buyers being able to take on bigger mortgages.’

Late last year, the outlook for mortgage rates in 2025 was looking rosy. Financial markets were expecting as many as four cuts to the Bank of England base rate this year. 

That would bring it down from its current level of 4.75 per cent to as low as 3.75 per cent. 

Mortgage deals are heavily influenced by the base rate, so it looked as if they, too, would be heading down.

But just days into the new year, that outlook was ruptured by mayhem in the bond market.

The interest rate, or yield, on government debt rose sharply as international bond markets convulsed, and investors became increasingly concerned about the impact of Chancellor Rachel Reeves’ first Budget in October last year.

Major banks including HSBC, Santander and TSB announced rates hikes last week.

The rates on UK government debt fell slightly last week after figures showed inflation dropped back – by 0.1 percentage point – in December, raising hopes that the outlook for interest rates may not be quite as bad as feared. But all this uncertainty has left homebuyers feeling less emboldened.

The latest data from Halifax last week revealed that house prices fell for the first time in nine months in December.

Tax crunch: Stamp duty rates are rising from April 1 this year and experts are expecting a rush of transactions as buyers try to beat the deadline

Which areas are defying gloom?

Among the property experts Money Mail has spoken to there is overwhelming consensus: in 2025 the areas that will see the most growth are those where people on average incomes can still afford to buy.

Richard Donnell, head of research and insight at Zoopla, points out that in most London areas, as well as the commuter belt around it, prices have become unaffordable for most and therefore are unlikely to see much further growth this year.

Households in London need to make well over £70,000 a year to be able to afford a home with an 85 per cent mortgage, assuming they borrow four times their income.

‘Where we are expecting growth is in cities with large, growing economies and strong employment rates, but have not seen red-hot house price growth in recent years,’ he says.

The top property hotspots for England and Wales include Newcastle upon Tyne, Leeds, Stoke-on-Trent, Sunderland, Manchester, Liverpool and Birmingham.

Zoopla ranked the 120 postal areas in the UK according to the outlook for house prices this year. 

To come up with its ranking it considered affordability in each area, how many days it takes for a home to sell, what proportion of homes have been on the market for more than six months, and what proportion have had a price cut of more than 5 per cent.

Nine of the ten hotspots this year are in Scotland, according to Zoopla’s forecasts. The top three are Motherwell, Glasgow and Paisley.

Prices here are considerably below the UK average of £267,500, according to Zoopla. 

A typical home in Motherwell for example, costs £129,055. Homes in the three areas are selling in around 15 days – the UK average is 38 days.

Cardiff is the top hotspot in Wales. However, it only ranks at No 34. Sutton is the only London area to feature in the top 40, ranking at No 38.

All of the bottom five areas are in London – those with the postal areas NW, SW, EC, W and WC. It’s easy to see why when you look at the average house prices in each area. 

The most expensive is £850,357 in West Central London, but even the cheapest of the five – North West London – has an average price of £635,416.

Buyers’ market: Buyers are currently less likely to pay over the odds – and less likely to compromise

What are buyers looking for?

It is still overwhelmingly a buyers’ market in 2025. As a result, buyers are simply less likely to pay over the odds – and less likely to compromise.

Alex Pelosi-Buchanan, who sells property in Monmouthshire, South Wales, for agency eXp, says buyers in his area are concerned about getting value for money. 

‘They are cautious about the market and don’t want to feel that they’ve overpaid,’ he says.

He adds that homes that are better presented tend to sell the fastest. ‘The cost of renovation is still high since the price rises following the pandemic,’ he says. ‘Buyers think twice before buying somewhere that needs work.’

Melanie Attwater serves a very different market but sees the same trends. She sells homes valued at £1 million or higher around Surrey for eXp Luxury.

‘After the pandemic, everything sold and there was a large pool of buyers. But this year, there are far fewer buyers and as a result they can afford to be pickier,’ she says. 

‘The homes that sell fastest are those that are turn-key ready – in other words, they do not need any work or updating.’

Marc von Grundherr, director of London lettings and estate agent Benham & Reeves, says he sees a similar trend in the capital.

‘It’s not like the old days when you could put it on the market overpriced and hope someone will agree to it because they love your home,’ he says. ‘All buyers have access to data online on how much similar properties are selling for.’

Pandemic plans still playing out

The post-pandemic property market was defined by the ‘race for space’ as buyers left cities in favour of outdoor space and home working. 

Then the past couple of years saw a reversal, with people who had moved out missing the city or resenting their longer commutes as they were required to return to the office more frequently.

This year, those trends will still play out, estate agents predict. Marc von Grundherr says buyers returning to London after moving to the countryside is driving demand for one key feature.

‘They all want big gardens because, of course, the first thing they did when they moved out of London is buy a dog,’ he says.

Von Grundherr adds that he has just sold a house to a couple one street away from the one they sold after the pandemic.

‘They moved out, but were spending more and more time back in London because first she had to be in the office for more days of the week, then he did, too. 

Eventually, they told me they just wanted to buy their old house back but, of course, they couldn’t. So I found them one near identical just one street away.’

Meanwhile, in Monmouthshire, Pelosi-Buchanan says that he is still seeing a steady number of buyers coming from other parts of the country looking for more affordable property and a better lifestyle. 

‘You can get a two-bed terraced house in Abergavenny for around £210,000 at the moment,’ he says. ‘We have good connectivity here due to the M4 and train connections, so we find people are happy to commute from Bristol or Cardiff.’

Capital costs: Households in London need to make well over £70,000 a year to be able to afford a home with an 85% mortgage, assuming they borrow four times their income

What about in London?

Richard Donnell at Zoopla expects growth in the capital to be fairly muted this year. But, even so, there are some areas that are likely to outperform.

‘If you’re brave, you could find value in flats, which have not really seen their prices rise since around 2016,’ he says. ‘That means that in real terms they are around 30 pc cheaper.’

Marc von Grundherr also sees promise this year in areas that are being regenerated. ‘I don’t think many people realised what the Elizabeth Line would mean until it was completed and running,’ he says.

‘Now areas such as Woolwich and Southall are being regenerated and are popular because now they are so well connected.

‘Prices are still high in Ealing Broadway, but Southall is now just three stops away on the Elizabeth Line and prices are around 30 per cent lower.’

Rush to beat stamp duty hike

Stamp duty rates are rising from April 1 this year and experts are expecting a rush of transactions as buyers try to beat the deadline.

At the moment, there is no tax to pay on the first £250,000, but this will fall to the previous level of £125,000.

First-time buyers pay no stamp duty when buying a home worth £425,000. This threshold will drop to £300,000, meaning they will go from paying nothing to paying £6,250 on stamp duty.

Sam Harper is an estate agent with agency James Laurence and sells homes in Birmingham city centre. 

He says: ‘We’re very busy at the moment – especially as buyers are trying to complete before the deadline. But we’re expecting a quiet May before it picks up again in the summer.’

The more buyers have to fork out on tax, the less they have to spend on their property, so this could help rein in house price growth. 

A second rule change could also boost activity in the market later this year.

Last Friday, watchdog the Financial Conduct Authority said it was looking into loosening mortgage rules, which were introduced in the wake of the 2008 financial crisis to protect borrowers from reckless lending.

Homebuyers may find that they can borrow more than in the past, while first-time buyers with small deposits could be thrown a lifeline. 

The rules require lenders to ensure that customers would still be able to repay their mortgage even if rates escalated.

But it’s not certain any changes would come into force this year, as they are still at proposal stage.

rachel.rickard@dailymail.co.uk