Following the election of the new Labour government last summer this offered some stability to the UK markets. However, the UK remains influenced by global factors and the recent stance taken by the US regarding their relationship and support for Ukraine, as well as other European countries now offering additional support to Ukraine, is yet to unfold. There might be a large cost to this with the UK offering additional support and the possibility of the US placing tariffs on the European markets remains to be seen and any impacts felt.

Domestically, if interest rates continue to decline or stabilize in the coming months, borrowing costs for potential homeowners may become increasingly affordable. This scenario is particularly advantageous for first-time buyers, who are often sensitive to changes in mortgage rates. A decrease in interest rates can make homeownership more attainable, especially for those who may have been priced out of the market in previous years. This of course doesn’t offer assistance to those buyers looking to port fixed term mortgages. If buyers have the ability to do so, as always, it pays to ‘shop’ around for the best deals when negotiating any mortgage agreement.

Despite the potential benefits of lower interest rates, Consumer Price Index (CPI) inflation which recently increased from 2.5% to 3% (Jan 25) does add a layer of complexity to the market. The largest upward contribution to the monthly change in the CPI annual rates came from transport, and food and non-alcoholic beverages; the largest downward contribution to both came from housing and household services. The global factors, some mentioned above may well lead to inflationary pressures as the year progresses. This inflation rate marks the highest point in ten months and we will need to asses this as the year progresses with a keen eye on global factors.

The trend towards remote work is expected to continue, with many employees opting for flexible arrangements that allow them to work from home. This shift increases interest in properties that provide ample space, dedicated home offices, and access to tranquil environments. The Cotswolds, renowned for its picturesque landscapes, charming villages, and outdoor recreational opportunities, is likely to attract individuals and families seeking a more serene and spacious lifestyle away from the hustle and bustle of urban areas.

Families continue to prioritise quality education, further boosting demand for homes located within desirable catchment areas for outstanding state and private schools. Properties near highly regarded institutions often see increased competition among buyers, which can drive property prices up in these sought-after locations. The emphasis on education adds a layer of value to homes in the area, making them appealing not just as residences but as long-term investments.

With a growing awareness of environmental issues and the impact of climate change, there is likely to be an increased demand for eco-friendly homes. Many buyers are prioritising energy-efficient properties equipped with sustainable features, such as solar panels, proper insulation, and renewable energy sources. Developments that focus on sustainability and reduce environmental footprints are becoming increasingly attractive to a conscientious buyer base that values ethical living.

Historically, the Cotswolds have demonstrated remarkable resilience during challenging market conditions, often weathering economic downturns more effectively than other regions. This stability may attract more investment from buyers who are seeking a secure place to invest their money, as they recognise that the Cotswolds generally handles economic fluctuations better than many other areas in the UK.

The affluent market for luxury and second homes is anticipated to remain strong. Wealthy buyers are often on the lookout for countryside retreats where they can unwind and enjoy nature. As the Cotswolds is known for its beautiful scenery and excellent quality of life, it continues to appeal to this demographic, which further supports growth in the prime residential market.

In conclusion, the residential market in the Cotswolds is anticipated to recover and experience measured growth in 2025. This evolution presents exciting opportunities for both buyers and sellers to navigate the evolving landscape. As one of the most desirable regions in the UK, known for its charm and natural beauty, the Cotswolds are well-positioned for an invigorating spring market ahead.