Timing is everything when selling your home. UK house prices rose by 4.7% in 2024 compared to the previous year, leading many homeowners to consider putting their property on the market. But would waiting until 2026 bring even higher returns? With mixed signals from the property market, here’s what you need to know to help you decide whether to sell now or hold off until 2026.
What’s the current state of the UK property market in Q1 2025?
House prices are heading up again, with a 4.7% jump in 2024 pushing the average UK home to £297,166. The market’s bouncing back differently across the UK however. Northern Ireland’s racing ahead with 7.4% growth, while London and East Anglia are creeping up more slowly at 2% and 0.5%.
Many estate agents suggest they’re busier than in recent years, with loads more buyers looking around and making offers. Many are keen to buy before the stamp duty rules change in April 2025.
Mortgage rates have also decreased slightly and probably aren’t as intimidating as they were in 2023, but they’re still higher than people are used to. Buyers probably still can’t stretch their budgets as far, and sellers aren’t pocketing as much profit when they sell.
Market experts reckon house prices will keep climbing through 2025, though not dramatically. Somewhere between 2.5% and 4% seems to be the most likely.
Key economic factors influencing the property market
The economy obviously plays a huge role in whether it’s a good time to sell your home. Right now, we’re seeing some interesting shifts in inflation, interest rates, and wages that are worth watching closely.
Inflation trends
Prices are rising faster than they were a few months ago, with inflation hitting 2.6% in November 2024 (up from 2.3% in October). This matters for the property market because it affects both how much homes are worth and what buyers can afford. While moderate inflation can push property values up, it also means buyers have less spending power.
Interest rates
The Bank of England’s kept interest rates at 4.75% since late 2024. Mortgage rates are still higher than they’ve been for years, making monthly payments more expensive for buyers. First-time buyers especially are finding it harder to get on the property ladder, which affects how many potential buyers are out there hunting for a new home.
Employment and wage growth
There’s good news on the jobs front, thanks to unemployment staying low and wages going up. The average UK salary is now £35,648, with most workers getting pay rises around 4.5%. When people feel secure in their jobs and wages are rising, they’re more likely to think about buying property. This could spell more potential buyers for your home.
Impact of the Autumn 2024 Budget on the property market
The Autumn 2024 Budget brought some big changes for anyone thinking about selling their home. Most notably, buyers purchasing additional properties like buy-to-let investments or second homes now face a higher 5% stamp duty surcharge, up from 3%. For someone buying an average-priced second property, that’s an extra £7,000 to pay upfront.
The Budget’s impact is already showing in the numbers. Property sales dropped 8% after the announcement, with just 92,640 homes changing hands. Many people seem to be holding off to see how these changes play out.
The government’s also putting more money into affordable housing, which could bring more first-time buyers into the market. But with these tax changes and higher interest rates, some market experts have lowered their predictions for house price growth over the next few years.
Stamp Duty Land Tax (SDLT) changes
Since October 2024, buying additional properties has cost more. The surcharge jumped from 3% to 5%. This hits investors harder when buying expensive homes. Plus, first-time buyers face changes too. As of March 2025, their tax-free threshold on stamp duty drops from £425,000 to £300,000, likely pushing many to buy before the deadline.
Capital Gains Tax (CGT) adjustments
The Autumn Budget 2024 introduced significant changes to Capital Gains Tax (CGT) rates, effective from 1st April 2025, which are expected to have a notable impact on the property market. For non-residential assets, CGT rates will rise to 18% for basic rate taxpayers and 24% for higher rate taxpayers, up from the previous rates of 10% and 20%, respectively. While CGT rates for residential properties remain unchanged at 18% for basic rate taxpayers and 28% for higher rate taxpayers, the increased rates for non-residential assets may lead to a wave of property owners seeking to sell before the higher rates take effect. This is particularly relevant for landlords with mixed-use or commercial properties, as the higher tax burden reduces profitability on disposals. The anticipated rush to sell non-residential properties ahead of April could create a temporary surge in listings, potentially softening prices in this segment of the market. However, for residential property owners, the lack of CGT rate changes provides stability, which may help maintain steady activity in the housing market.
Property market forecast: 2025-2026
Property prices are set to keep climbing over the next two years, but several factors will influence just how much they rise.
Predicted house price movements
Market watchers expect house prices to rise by 4% in 2025 as mortgage rates become cheaper and buyers feel more confident. Growth could pick up to 5.5% in 2026, assuming the economy stays stable and lending conditions remain good.
Anticipated interest rate fluctuations
The Bank of England’s base rate currently sits at 4.75%, but experts think it’ll drop to around 3.7% by late 2025 and settle at 3.5% in 2026. The result should be cheaper mortgages, though recent jumps in government borrowing costs have made predictions less certain.
Economic outlook and its effect on the property market
The economy looks set for modest growth, with GDP expected to rise 0.4% by late 2025. Inflation should hit the Bank of England’s 2% target by 2026. The government plans to build 1.5 million new homes and make planning laws simpler, which could help more first-time buyers get on the ladder.
Personal circumstances and timing the sale
While market conditions matter, your own situation is always the most important aspect when deciding whether to sell your home.
Consider your financial situation
Check your mortgage terms, as selling now might mean paying early repayment charges. Look at what you still owe and compare it with your home’s current value. Consider whether you have enough savings for your next move, including deposit, stamp duty, legal fees and moving costs.
Look at your lifestyle considerations
Think about why you want to move. Maybe your family’s growing, you need to be closer to work or your home’s become too big to manage. School catchment areas often drive moving decisions, especially if you need to move before the new school year starts in September.
What are your long-term goals?
Consider where you want to be in five or ten years. Are you planning to retire? Thinking about downsizing? Want to move to a different area? These goals should guide your decision about whether to sell now or wait until 2026.
Expert recommendations: Sell now or wait until 2026?
Making the right choice depends on both market conditions and your personal situation. Here’s what to consider for each option.
Scenarios favouring selling now
Selling your property in 2025 could be a smart move due to anticipated changes in the UK property market and taxation landscape. The Capital Gains Tax (CGT) rate increases for non-residential assets, announced in the 2024 Autumn Budget and effective from 1st April 2025, are likely to create a rush of sellers trying to offload commercial and mixed-use properties in Q1, before the new rates take effect. This temporary surge in supply could depress prices in the commercial property sector, but it also means that demand from buyers eager to secure deals before the rate hikes could create short-term opportunities for competitive sales. If you own a residential property, the unchanged CGT rates offer stability, and current market conditions with relatively low supply could work in your favor to achieve a strong sale price.
Additionally, the economic uncertainty surrounding rising interest rates and their impact on the affordability of mortgages may make 2025 an ideal time to sell. As interest rates are predicted to remain high in the short term, potential buyers might be motivated to secure properties sooner rather than later, fearing further rate increases. Selling in 2025 allows you to benefit from this buyer urgency and potentially avoid any negative price corrections that could occur if rates continue to strain affordability and suppress demand in 2026.
Waiting until 2026
Waiting until 2026 to sell your property could allow you to benefit from a more favorable market environment once current economic pressures have eased. While interest rates are high in early 2025, many experts predict that rates may stabilize or even begin to decrease in late 2025 or 2026 as inflationary pressures subside. Lower interest rates would improve mortgage affordability for buyers, likely increasing demand and potentially driving property prices upward. If you’re not in a rush to sell, holding onto your property until the market strengthens could help you secure a higher sale price.
Moreover, the property market in 2026 may be less affected by the short-term fluctuations caused by the implementation of the CGT rate increases. The rush to sell non-residential properties in early 2025 might lead to temporary price instability, especially in the commercial sector. By waiting until 2026, you allow the market to recalibrate, giving buyers and investors more confidence. For residential property owners, this period of recovery may coincide with renewed buyer activity, particularly if pent-up demand from cautious buyers resurfaces as economic conditions improve. Holding out until 2026 could position you to capitalize on these more stable and potentially more lucrative market conditions.
How to sell a house super quick
If you need to sell quickly and can’t wait for the right market conditions, Property Rescue offers a guaranteed sale within weeks if you need to move quickly. We’ll make an offer within 24 hours and can exchange contracts in as little as 48 hours.
If you want to sell a property before Jan April 1st, you’ve probably missed the boat already in terms of going the traditional estate agent route, but you can still sell before in time if you sell directly to us.
We also cover all costs including legal fees, EPCs and valuations. Unlike auction sales where final prices are uncertain and you pay fees, Property Rescue provides a guaranteed price with no hidden costs.
To sell or not to sell
In an uncertain market, whether to sell now or wait until 2026 comes down to your personal situation. While house prices are predicted to rise further by 2026, that shouldn’t be your only consideration. Review your finances, lifestyle needs and long-term goals to make the best choice for you. And if you need a quick sale, Property Rescue can help with a free, no-obligation quote to see how much your home is worth.