As we look forward to 2025, the property sales market is poised for another year of growth, building on the surprisingly strong performance of 2024. The past year saw a resurgence in confidence among buyers and sellers, an uptick in transactions, and a stabilizing of market conditions—factors that set the stage for continued progress. For Edinburgh homeowners considering selling next year, 2024 has certainly laid strong foundations for a promising 2025.
A STRONG RECOVERY IN 2024
The housing market outperformed expectations in 2024, defying earlier cautious predictions. Sales completions rose by 10% compared to 2023, and house prices followed suit with steady growth. This momentum was driven by two key factors:
- Higher Household Incomes: Between 2022 and 2024, average household incomes climbed by an impressive 15%, giving many families greater financial flexibility.
- Falling Mortgage Rates: Mortgage rates reduced by 1% over the past year, settling at an average of 4.1%. While still higher than pre-pandemic levels, this drop has been a significant confidence booster for buyers.
SUSTAINED MOMENTUM IN 2025
The positive trends of 2024 are expected to carry into 2025. Sales transaction volumes are forecasted to grow by a further 5% year-on-year. Meanwhile, house prices, which rose by 2.3% across Scotland (and by a more modest 0.9% in Edinburgh) in 2024, are projected to climb more sharply in 2025—potentially up to 5%, according to some forecasts.
A MORE BALANCED MARKET
One of the standout features of the market recovery has been the improved balance between supply and demand. In 2024, a steady stream of sellers returned to the market, leading to a healthier stock of homes for sale. This increase in supply has helped ease price competition, fostering a more sustainable market environment.
ENHANCED BUYER MARKET
While mortgage rates are unlikely to see a dramatic drop in 2025, lenders are adapting to the market. Innovative approaches to affordability assessments are expected to provide buyers with more flexibility and leverage. This evolution in the lending landscape will likely enhance buyer confidence and purchasing power throughout the year.
CAUTIOUS OPTIMISM AHEAD
Uncertainty around the broader economy and potential interest rate movements persists, but the property market is well-positioned for another year of steady progress. Strengthening household incomes, combined with the lingering effects of reduced mortgage rates, create a favorable outlook for both buyers and sellers in 2025.
With modest price increases and rising sales volumes, 2025 could be the ideal year to take the next step in your property journey.
If you’re considering selling your home next year, find out what it’s worth today using our instant online valuation tool. Our experienced estate agency team will be in touch to help guide you through the next steps.