Hike in UK property values by 3.3% within a year - predicting trends for 2025
Unleashed: UK Housing Market's Resilience, Unearthed
The British housing market saw a 3.3% surge in house prices during the 12-month period ending in November 2024, pushing the average price to an eye-watering £290,000. While October's figures showed a 0.4% dip, the annual increase remains strong, signaling the market's robustness amidst economic and political turbulence.
Darrell Walker, ModaMortgages' director of sales and distribution, credits the surprising October-November dip to the uncertainty surrounding the Autumn Budget. He notes the annual increase of 3.3% as a clear testament to the market's resilience.
Jason Tebb, president of OnTheMarket, adds that two interest rate cuts in 2024 boosted market confidence, which is crucial for the real estate sector. With inflation easing slightly to 2.5%, there's hope it will curb the Bank of England's urge to further delay rate reductions.
Unlike other indices from Nationwide, Halifax, and Zoopla, the Land Registry's house price index occasionally lags, but this year, it confirmed the overall upward trend—with houses in England fetching an average of £306,000, Wales at £219,000, and Scotland at £195,000.
The Northern Ireland data, calculated by Land & Property Services Northern Ireland, shows a 6.2% increase in the average house price in the year to Q3 2024, reaching £191,000. Engagingly, London and the South East experienced the slowest growth rates, making these regions the least desirable for property seekers.
Among English regions, the North East witnessed the highest annual house price inflation of 5.9%, followed by the North West and Yorkshire and The Humber, boasting increases of 5.7% each.
As for property types, detached houses remain the priciest, costing an average of £436,949, while flats and maisonettes are the most affordable, with average prices of £233,230. Interestingly, terraced houses showed the strongest growth over the 12 months to 2024, boasting a 4.7% price rise.
First-time buyers in Great Britain paid an average of £244,519, whereas former owner-occupiers paid £332,626, indicating a clear disadvantage for new entrants in the property market.
Unveiling the 2025 outlook for house prices, experts submit that mortgage rates will play a crucial role, followed by changes in stamp duty thresholds. The surge in demand prior to the stamp duty deadline and increased lender rates due to turmoil in the gilt market may cause a market correction once the deadline passes.
Ultimately, 2025 remains a year of uncertainty with possible market fluctuations driven by mortgage rates, central government policies, and wider economic variables like inflation and wage growth. Buyers and investors must tread with caution, carefully considering these factors before making crucial property decisions.
[1] Knight Frank raises UK house price growth forecast to 3.5% for 2025 - Financial Times[2] UK house price growth to remain modest in 2025 despite mortgage rate cuts - Landlord Today[3] UK house prices hit new high as demand outpaces supply - Zoopla[4] House price growth: Who's winning in 2025? - Telegraph Money
- The strength of the UK housing market, evidenced by a forecasted 3.5% house price growth in 2025 by Knight Frank, underscores the resilience of the property market in personal finance and real-estate investment.
- In the realm of finance and investing, interest rates play a pivotal role in shaping the housing market, as evidenced by the market's response to two interest rate cuts in 2024, which boosted market confidence.
- As house prices continue to surge in the UK, with average prices reaching £290,000 in 2024, individuals and families may find it challenging to enter the real-estate market, particularly first-time buyers who paid an average of £244,519 in 2024.
