UK house prices return to growth in 2024 according to Zoopla as it reveals predictions for 2025
HOUSE prices have recovered and are set to finish the year strong as activity in the property market is higher than this time last year.
A typical home in the UK is now worth £267,500, 1.9% higher than a year ago, according to the latest data from property website Zoopla.
Prices have grown in all UK regions, ranging from 0.7% in the South East to 6.8% in Northern Ireland.
Some of this growth has been driven by buyers and sellers returning to the market after they put off moving due to high mortgage rates.
As a result, the number of sales agreed in the last four weeks is 23% higher than in the same period last year.
Zoopla expects the property market to remain stable and house prices to grow by 2.5% next year.
Meanwhile, as more homeowners have put their properties up for sale the amount of choice for buyers has increased.
As a result, it has become a buyer’s market, as the gap between asking and selling prices has widened.
Buyers are now typically agreeing to sales which are 3.6 below the asking price, Zoopla said.
In comparison, in the summer they agreed to sales which were 3.2% lower than the asking price on average.
Zoopla suggests this is because buyers are becoming more cautious about what they will pay for a home as mortgage rates have edged up and households consider the impact of the budget on them.
It expects buyers to remain cautious, which will keep house price growth under control in 2025.
Richard Donnell, executive director at Zoopla, said: “Affordability constraints will keep the pace of house price growth in check over 2025 but there will be enough price inflation to support 5% more home moves.
“There is a sizable pipeline of sales that will complete in the first half of 2025 with many hoping to avoid higher stamp duty costs from next April.”
The number of homes in the process of completing a sale has increased by 30% compared to this time last year.
Around 283,000 homes, which are worth a combined £104billion, are set to complete a sale in 2025.
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IF you're looking for a traditional type of mortgage, getting the best rates depends entirely on what's available at any given time.
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You’ll also need to factor in fees for the mortgage, though some have no fees at all.
You can add the fee – sometimes more than £1,000 – to the cost of the mortgage, but be aware that means you’ll pay interest on it and so will cost more in the long term.
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This is the largest end of year total value for four years.
Some of this growth will be down to buyers racing to complete a sale before stamp duty thresholds increase in April.
The last government increased the stamp duty thresholds in order to make it cheaper for some homebuyers to get on the ladder.
These thresholds were put in place until March 31, 2025.
But in the Autumn Budget the current government chose not to extend them beyond this date.
Property market predictions for 2025
Zoopla suggests that the outlook for the housing market next year will be dictated by several key factors.
The strength of the economy and labour market will control how much homebuyers can afford.
Meanwhile, mortgage rates will dictate how much they can borrow.
These factors will be important alongside how affordable homes remain across the UK.
Zoopla expects mortgage rates to remain at the current level but buyers will remain vulnerable to the economy and the impact of the budget on jobs.
It forecasts the number of property transactions to increase from 1.1million in 2024 to 1.15million in 2025.
House prices by region
Zoopla expects house prices to increase by 2.5% during 2025 but the level of growth to vary per region.
The ongoing North-South divide could mean there is lower house price growth in Southern England and higher growth in other regions.
This is because of the affordability of housing across the UK and how much house prices have risen in comparison to household incomes.
House prices in London have climbed by 83% since 2010.
In the same period, property prices rose by 70% across the Southern regions, 66% across the Midlands and 56% in Wales.
At the other end of the spectrum is Northern Ireland, where prices rose by just 19% in the past 14 years.
Meanwhile, in Scotland prices are just 30% higher, while in the Northern regions they are up 41%.
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