The UK housing market remains robust, with average house prices hitting a record £268,144—up 3.7% year-on-year. Northern Ireland leads regional growth at 6.8%, followed by Wales and the North West of England. Improving mortgage rates and increasing buyer confidence continue to drive demand, while upcoming tax changes and the Autumn Budget are adding urgency among buyers. Experts predict moderate price growth into 2025, influenced by changing economic conditions and policy developments.
House prices grew at the fastest annual pace for two years in November, according to the latest survey from Nationwide, UK largest mortgage lender.
The lender said the price of a typical UK home rose by 3.7% last month compared to a year earlier, with property values close to a record high.
Nationwide noted that the housing market had remained “relatively resilient” in recent months, with the number of mortgages approved at near pre-pandemic levels.
Mortgage approvals in October hit the highest monthly level since August 2022, according to Bank of England figures released last week.
The UK property market is experiencing unprecedented growth, with house prices reaching record highs. As demand continues to rise, driven by easing mortgage rates and increased buyer confidence, regions across the UK are seeing significant price surges.
Record growth from UK property price skyrocketed due to tight supply for real estate and strong economic consensus by the public.
In this blog, we’ll delve into the factors propelling this growth, the regional variations, and what you can expect from the market in the coming year.
House prices in the UK have soared to unprecedented levels. The average property now costs £268,144, close to the record high of £273,751 reached in August 2022. This marks a 1.2% rise from October and an impressive 3.7% increase year-on-year, setting a new record for the property market.
Northern Ireland continues to show the strongest annual growth, with house prices rising by 6.8%. Both Wales and the North West of England have also experienced notable increases, seeing price rises of 4.1% and 5.9%, respectively. These regional surges reflect a broader trend of rising demand, which is pushing property prices to new heights.
Amanda Bryden, the head of mortgages at Halifax, highlighted that UK house prices rose for the fifth consecutive month in November, with a 1.3% increase in the month alone—the largest rise so far this year. This brought the annual growth rate to 4.8%, its strongest level since November 2022.
Bryden noted that the figures show improving demand for mortgages, aided by an easing of mortgage rates which has boosted buyer confidence. However, despite these positive trends, many prospective buyers still face affordability challenges. There is also the risk that buyer confidence may waver in response to ongoing economic uncertainties.
Experts predict that house prices will continue to rise through 2025, albeit at a more moderate pace. The combination of positive employment figures and lower interest rates is expected to sustain demand in the property market. However, the market’s trajectory may be tempered by broader economic shifts, including inflation and the possibility of higher borrowing costs.
Nathan Emerson, Chief Executive of Propertymark, expressed optimism about the property market’s performance, noting a resilient trend in house price growth over the year. He also highlighted that the easing of interest rates has increased buyer confidence, which should help sustain activity in the housing market.
Robert Gardner, chief economist of Nationwide, said low levels of unemployment combined with pay increases that were outstripping inflation had helped to “underpin” the housing market.
Tom Bill, Head of UK Residential Research at Knight Frank, pointed to the potential influence of Labour’s Budget on the housing market. He noted that rising borrowing costs and the end of sub-4% mortgage rates could put downward pressure on house prices in the coming months. Bill added that the upcoming stamp duty increase in April 2025 could prompt many buyers to act sooner, further inflating the market in the short term.
Sarah Coles, Head of Personal Finance at Hargreaves Lansdown, commented that despite expectations of a quieter market, house prices have continued to rise faster than anticipated. Buyers, particularly those with multiple properties, are also capitalising on the current tax situation, making the most of the opportunity before future changes to property taxes take effect.
Verona Frankish, Chief Executive of Yopa, emphasised that the recent uplift in market activity was a direct response to the Autumn Budget. With the anticipated stamp duty increase next April, many buyers are keen to complete transactions before the new costs take effect. This sense of urgency is fueling the current property price growth and driving a competitive market.
As we move into 2025, the UK property market remains in a state of flux, with record-high prices continuing to reflect a growing demand for housing. While buyer confidence has been bolstered by lower interest rates and improved affordability, challenges persist. Whether the market can sustain this momentum remains to be seen, but for now, it’s full speed ahead for the UK’s housing sector. Buyers, particularly those looking to complete before the stamp duty increase, should act with intention as they navigate the competitive market.
At Value Invest, we specialise in helping buyers and investors navigate the complexities of the real estate market. Whether you’re looking to buy, sell, or invest, our expert team can provide you with the guidance you need to make informed decisions. Get in touch with us today to explore the latest opportunities and stay ahead of the curve in this dynamic market.
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