UK Housing Market Update: Key Insights for December 2024

The UK housing market continues to demonstrate resilience, with 2024 closing on a positive note and setting the stage for growth in 2025. November 2024 saw annual house price growth of 1.5%, marking a consistent upward trend. Every UK region experienced positive price inflation, and forecasts predict a 2.5% increase in house prices throughout 2025.

Sales activity has been robust, with the number of sales agreed 19% higher than at the same point last year. Buyer demand has surged by 25%, spurred by improved affordability and the stabilisation of mortgage rates. Lenders are also implementing innovative affordability measures, which are expected to further stimulate the market in the coming months.

Mortgage rates have played a pivotal role in this resurgence. The average rate now sits at 4.1%, with expectations of stability around 4.25% into 2025. This stability, combined with strong household income growth of 15% over the past two years, has helped balance affordability challenges and repair previous market over-valuation.

Regional differences remain prominent. Northern areas and Northern Ireland are leading the way with house price growth. In contrast, parts of southern England, such as Ipswich and Dartford, are experiencing slower recovery due to ongoing affordability constraints.

Upcoming changes to the Stamp Duty Land Tax (SDLT) in April 2025 could create ripples across the market. With 83% of transactions expected to be affected, mid-range properties may see reduced activity, potentially tempering price growth in this segment. However, overall market momentum remains strong, with a projected 5% increase in housing transactions next year according to the latest Zoopla Housing Index, bringing the total to 1.15 million.

The UK housing market has shown remarkable adaptability, driven by lower borrowing costs, innovative lending, and higher household incomes. While challenges such as regional disparities and tax changes lie ahead, the outlook for 2025 remains optimistic, with steady price growth and sustained buyer interest.

Curious about your property's value? Contact us today for further market sentiment and the impact this has for you and your home when asking for a FREE no-obligation market appraisal at movinghome@mchugohomes.co.uk or visit our website