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How will rising inflation impact Richmond Upon Thames’ property market in 2025? Find out what buyers & sellers should know. Read the full blog now!
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Just three weeks ago, optimism was on the up as the Monetary Policy Committee voted to cut the Bank of England base rate to 4.5%, hinting at relief for mortgage holders. Fast forward to just a couple of weeks later, and the narrative has shifted.
Inflation has unexpectedly climbed to 3%, being above the 2.8% prediction, raising fresh concerns for buyers and sellers alike.
So, what could this mean for the Richmond Upon Thames property market in 2025?
Let’s take a dig into what is going on, and how increasing inflation might affect you and your property ambitions if you are thinking of moving in Richmond, Twickenham or Teddington.
The UK property market as a whole has experienced significant shifts over the past few years, from the post-pandemic boom, which saw property prices skyrocket, to the cooling effect of rising interest rates over the course of 2021 and through to the middle of 2024 when they finally began to fall – albeit, slowly.
Now, with inflation rising to that 3% figure, many prospective buyers, sellers, and investors will be left wondering what this means for house prices, mortgage rates, and overall market activity.
Inflation can influence the property market, but let’s explore how in a bit more detail, and take a look at and what local buyers, sellers, and investors in Richmond Borough should expect in the coming months.
Inflation is a key economic indicator that affects nearly every financial decision – from everyday purchases to major investments like property.
When inflation rises, the cost of living increases, thus reducing household spending power. It is one of the main drivers that can produce a response from the Bank of England when it comes to voting on the base rate level. The issue is, it may cause the Monetary Policy Committee to delay or even reconsider its much-anticipated interest rate cuts. The reason that rates climbed so high over the last two years was almost entirely down to the staggering inflation we experienced, which rose to as much as 11% at its peak.
But why does this matter for the Richmond Upon Thames property market in 2025?
Rising inflation has several knock-on effects:
For first-time buyers, affordability remains a major hurdle – not least in a high value area such as Richmond Borough. This is worsened by high property prices relative to income and stricter mortgage rules. In a higher cost-of-living environment, saving for a deposit has also become increasingly difficult.
Many had hoped that falling inflation would at least lead to lower mortgage rates, as the recent base rate cut seemed set to usher in. However, with inflation hitting 3%, further rate cuts could be postponed, meaning first-time buyers may still face higher-than-hoped-for borrowing costs.
Some buyers are waiting to see if property prices drop, but realistically, even if there were a drop, any such reduction is unlikely to be significant enough to meaningfully impact mortgage costs. Nevertheless, where there is reduced demand, this could present an opportunity for well-prepared buyers to negotiate better deals – a so-called ‘buyers market’.
House prices are unlikely to fall at all, however, as continued housing demand and supply shortages are keeping the market stable. Despite economic headwinds, analysts still expect modest price growth of 2-4% this year.
The private rental sector has faced mounting challenges, from higher mortgage rates to new regulations around energy efficiency and tenant rights. Some landlords have already exited the market due to declining profitability – something that has been a topic of conversation amongst industry circles.
With inflation still higher than expected, landlords could see further cost pressures, including increased maintenance costs and energy bills – and of course, that affects tenants too, as it does tend to lead to landlords needing to increase the rent they charge.
If house prices cool, some investors may see an opportunity to expand their portfolios at a lower cost, particularly as buy-to-let investment in Richmond Upon Thames remains an attractive long-term strategy. There is still little out there that offers better value as an investment than bricks and mortar, despite the challenges landlords face.
For homeowners planning to upsize or relocate, the rising cost of living and borrowing could slow decision-making. Those on fixed-rate mortgages might hold off on moving until rates improve, whilst those with variable-rate mortgages may feel increasing financial pressure.
Sellers may need to adjust their pricing expectations, particularly if demand weakens in their local area. As mentioned, overall this year, experts do tend to agree that property prices are likely to increase – but most have come in at predictions of 2% to 4%; if they are hearing ‘valuations’ from estate agents at 10% or 20% higher than a similar property sold for recently in the area, they should certainly tread carefully.
Richmond Upon Thames has long been one of London’s most desirable boroughs, with its stunning riverside location, excellent schools, high quality local services and of course our high-end property market.
With average property prices significantly higher than the national average, Richmond Upon Thames remains a competitive market. In 2024, the average price per square metre stood at around £8,120, compared to £6,360 in London overall.
Whilst affordability pressures might slow the rate of price growth, we do benefit from a really strong local economy and that continued demand from buyers looking for premium properties mean that Richmond’s property market is likely to remain resilient.
At the moment, despite the inflation news, the property market remains stable. There has been a recent uptick in market activity – perhaps propped up by the post-Christmas surge alongside the forthcoming stamp duty increases, set to kick in on April 1st, pushing buyers to move quicker than normal to avoid the increase. Nevertheless, overall confidence in the market is still relatively high.
That being said, with inflation running a little higher than forecast, both buyers and sellers can benefit from being strategic in their approach:
✅ For Buyers: You should assess affordability carefully, consider long-term stability, and negotiate strategically whilst still being aware that even in a Buyers Market, Richmond, Twickenham and Teddington do still command a higher than normal demand.
✅ For Sellers: Price realistically, boost property appeal, and be open-minded in negotiations. We are a sought after location – but that doesn’t mean buyers have bottomless pockets, and there is a limit to how far they can, should and will go when the market tightens up.
Despite inflation’s surprise rise, Richmond’s property market remains resilient. While national headlines may spark uncertainty, local factors — such as continued buyer demand and the borough’s premium appeal — mean the market is well-placed to weather any economic turbulence.
In a changing market, knowledge is power. Buyers, sellers, and investors who stay informed and flexible will be best placed to succeed in 2025.
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Feb 2025
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