As another year begins to draw to its conclusion we indulge in a little reminiscing whilst dusting of our crystal ball to look at what 2025 might have in store.
“Where one door closes another opens” they say. So as the door starts to close on 2024 and across the country the doors of millions of advent calendars begin to open, we take a look back at this year’s property market and ponder what 2025 might have in store. As a busy agency firmly rooted in Dunfermline for approaching two decades, year in and year out we witness firsthand how the West Fife property market is evolving and feel well placed to make some predictions as to what next year might bring.
The National Context
First of all it should be said that at a national level Scotland’s property market has demonstrated remarkable resilience in recent years even in the face of some stiff economic challenges. Whilst few of us feel better off than pre-Covid given that food prices are around 30% higher than in 2019 and domestic fuel prices sit almost 50% higher, 2024 did at long last see a slowly improving economic picture. Inflation fell to below 2% (although there was a modest up-tick in November) and, being confident that it has now peaked, the Bank of England cut interest rates twice in the latter part of the year. Unemployment has remained low at around 4% and of course we have had a change of Government.
Interest Rates and Buyer Confidence
Interest rates and more particularly mortgage rates are a key driver of the housing market. We think that 2025 looks quite promising in this regard. Following upon the anticipated reductions in mid to late 2024, mortgage rates could well decline further. With wage growth now outstripping inflation this should create opportunities for both first-time buyers and home-movers some of whom delayed purchases during the higher-rate period. Coupled with lender competition, affordability is expected to improve, supporting steady demand across the region.
West Fife’s Unique Appeal
Now given that a large majority of our clients live here in Dunfermline and West Fife it will come as no surprise to hear that the area remains an attractive choice for buyers seeking value, space, and connectivity. Dunfermline, Inverkeithing, and Dalgety Bay, along with surrounding villages, provide a range of property options catering to diverse needs and are attractive not only to us “fly” Fifers but to incomers and in particular commuters to the capital. Affordability is a key strength here, with prices undercutting Edinburgh by a significant margin.
So, against this backdrop let’s look at which property types have fared particularly well, and which homes faced a more challenging environment.
- Family Homes: Three and four-bedroom homes below £250,000 in well-connected neighbourhoods remained in high demand. Duloch of course remains top of many buyers shopping lists given schooling and leisure facilities and ease of commuting.
- Period Properties and Flats: These continued to attract professionals and downsizers looking for character and convenience. A good one bedroomed flat in Dunfermline will now command a price of between £90,000 and £100,000 and a two bedroomed between £120,000 and £140,000 at the top end.
- New Developments: New build developments right across the area were again popular buys in 2024 especially with young families seeking modern amenities, low running and maintenance costs and proximity to schools and amenities.
- Large Executive Homes and Large Period Properties: The upper end of the market was one of the more challenging sectors and sales were a little slower in 2024. Economic and political uncertainty in the first half of the year caused would-be buyers to exercise caution and discretionary moves as opposed to essential moves were delayed by many.
Market Trends for 2025
Looking to 2025, the good news is that we anticipate a year of cautious optimism with more first-time buyers entering the fray whilst demand will remain strong for mid-sized homes. At the upper end of the market (locally £350,000 + ) we expect to see a modest improvement but do see this as an area which could remain slightly more subdued than the lower to mid-range.
- Price Adjustments and Stability:
Sellers in 2025 will need to remain realistic and in some cases may need to temper expectations. We anticipate that offers in the range of 3 – 5% above Home Report valuations will become the norm, reflecting lower interest rates and a slowly improving economy. We do not however see price rises outwith this range as buyers continue to navigate higher living expenses in other areas of their lives.. - Rental Market Challenges:
An area of the market we don’t talk about as often as we should. The rental market will continue to feel pressure from limited supply and rising demand. Increased costs for landlords, including higher borrowing rates, could further push up rents. For buy-to-let investors, West Fife remains attractive, offering strong rental yields, particularly in towns like Dunfermline where an 8% yield is not unusual - Energy Efficiency and Buyer Preferences:
Scottish Government initiatives around energy efficiency could exert some influence market in 2025. New-build homes, which often meet or exceed these standards, are expected to benefit. - First-Time Buyers:
After a challenging period, first-time buyer activity is likely to increase, supported by improved affordability and assistance from family contributions. Their focus will remain on smaller properties and fixed-price listings, which offer transparency and predictability.
Opportunities for 2025
For homeowners considering selling, 2025 represents an opportune time to capitalize on what we see will be steady demand. Strategic, realistic pricing and presentation will as ever be crucial to securing a sale.
For investors, West Fife continues to offer appealing prospects. Strong rental demand, competitive property prices, and future appreciation potential position the region as a reliable long-term investment choice.
Our Outlook
As we have said West Fife property market is poised for a year of stability and opportunity. Price growth will be modest not meteoric. We predict improved buyer affordability, lower interest rates and the enduring appeal of our region’s lifestyle. 2025 will be an exciting year to buy, sell, or invest. As always, our team is here to guide you through the market with local expertise and trusted advice.
If you’re considering a move or investment in 2025, don’t hesitate to contact us for personalized support. Together, we can navigate this evolving market to achieve your goals.
