The UK housing market has had its ups and downs, but 2025 is shaping up to be a much steadier year—especially here in Lancaster. After a challenging 2024, things are looking brighter with affordable homes, high demand, and improved financial conditions helping both sellers and buyers.
Renewed Confidence
Last year, uncertain interest rates, a slow economy, and changes in government policy shook the market. That turbulence made buyers and sellers nervous. Now that we’ve left last year behind, confidence is returning. and despite changes in the job market with higher national insurance rates, the overall housing market is holding strong.
Many experts now expect mortgage rates to settle around 3% to 3.5% by the end of the year for buyers with good deposits. Even a small drop in these rates can make a big difference, boosting the number of property transactions.
Stamp Duty Changes
Stamp duty has also played its part in the market’s ups and downs. In April, the government reintroduced a zero rate band on homes up to £125,000, down from £250,000. This change led to a quick rush of buyers in late 2024. History shows that after such moves, the market sees a brief spike followed by a short dip before things level out.
Supply and Demand
A key factor behind rising house prices is the ongoing imbalance between supply and demand. The UK’s population grows mainly through migration—about one million people a year—while new home construction hasn’t kept up. This gap keeps prices high and rents on the rise.
Lancaster benefits from this trend. The city offers more affordable housing than bigger cities, but the number of available homes, whilst at a 5-year high, is still actually limited. This means buyers often fstill ace competition, especially at the lower end of the market, which helps keep prices steady even when the wider economy faces challenges.
Home Prices Hold Strong
Even when the economy has its rough patches, home prices tend to stay resilient. Residential properties don’t change hands very often, and most homeowners aren’t affected by short-term price swings. Plus, many people still see property as a safe investment compared to more unpredictable options.
Local Market Trends in Lancaster
Lancaster remains a popular choice thanks to good schools, solid transport links, affordable housing, and a mix of rural and urban benefits. We are still seeing strong interest from both local buyers and those moving in from larger cities.
For example, in January 2025 there were 899 properties for sale in the Lancaster area—up from 387 in January 2022. This increase in available homes gives buyers more options and helps encourage moves. Some might worry that more homes for sale could push prices down. However, if you look back to 2008 when there were over 1,620 properties on the market, you’ll see that we still have a long way to go before supply overwhelms demand.
Looking Ahead
While economic shifts and policy changes will continue to play a role, the basics remain strong. The gap between supply and demand, along with slowly falling interest rates and ongoing interest in property investment, all point to a stable—and even growing—market in 2025.
That said, it’s important for homeowners in Lancaster to stay realistic about pricing. Over the past two years, only about 60.6% of homes listed for sale have sold, while nearly 40% were withdrawn unsold. Knowing our local market well is key to making the best property decisions.
If you’re thinking of moving in 2025 or just want to chat about your options in the Lancaster property market, please give me a call. Remember at JDG we are always here to help.
Thanks for reading
Michelle x
