The housing market in London is anticipated to thrive in 2025 following several years of modest price increases, influenced partly by companies urging employees to return to the office five days a week.

Since 2019, property prices in London have risen by 12 percent, compared to a 21 percent increase across the UK as a whole. However, Rightmove, a leading property search platform, has indicated that 2025 could signal a turning point for prices.

Along with the inherent appeal of the capital for both professionals and international buyers, the demand for housing in London is expected to intensify as more individuals resume office attendance. Notable firms like Amazon, Barclays, and Baillie Gifford have mandated their staff to return to full-time in-office work.

Tim Bannister, the head of property data at Rightmove, forecasts an increase of around 4 percent in UK house prices for 2025, with London’s market likely seeing even larger gains.

According to Bannister, house hunters are expected to have ample choices next year, even as he emphasizes that 2025 will still be a buyers’ market. Rightmove’s analysis shows that real estate agents currently have the largest inventory of homes available this December compared to any in the last decade.

Consequently, sellers are expected to price their homes competitively at the beginning of the year. The anticipated reduction of interest rates, with four cuts expected next year, could further entice prospective buyers into the housing market.

Bannister estimates that there will be approximately 1.15 million home sales in 2025, which is a 5 percent increase from 2024. This uptick in transactions is likely to encourage sellers to gradually raise their asking prices throughout the year.

Rightmove’s projection of a 4 percent rise in asking prices for 2025 marks its highest forecast since 2021, while also aligning with average long-term price growth trends.

“We anticipate a bustling year in 2025,” said Bannister. “With stamp duty rates set to increase from April 1, we expect the initial three months of the year to be especially active as first-time buyers, home-movers, and investors aim to finalize their purchases to avoid the new higher charges.”

Bannister also speculates that buyers may employ negotiation strategies, particularly for properties priced around £300,000, which is the new threshold at which first-time buyers will incur stamp duty, a reduction from the previous £425,000 limit.

In 2025, mortgage lenders are predicted to experience a surge in business as homeowners who obtained five-year fixed-rate mortgages during the 2020 “race for space” seek to refinance. Rightmove’s figures show that the average five-year mortgage rate in 2020 was 2.55 percent, compared to approximately 4.89 percent today.