(Commonwealth_ UK property prices have surged for the fifth consecutive month, with Halifax reporting a 1.3% month-on-month rise in November 2024. This increase has brought the average house price to a record-breaking £298,083, surpassing the previous peak of £293,507 in June 2022. The steady acceleration in the housing market is attributed to improving mortgage rates, a stable political environment, and better affordability driven by robust wage growth.
Stamp Duty Changes Driving Early 2025 Activity
The announcement of forthcoming changes to stamp duty has added urgency to the market. In April 2025, the current stamp duty threshold of £250,000 will revert to £125,000, potentially increasing tax bills for buyers. Similarly, the first-time buyer exemption will decrease from £425,000 to £300,000. These changes are expected to drive a flurry of activity as buyers aim to finalize transactions in early 2025 to take advantage of the existing rates.
Regional Trends: North West and West Midlands Lead Growth
Regionally, the North West of England has recorded the highest house price growth, with a 5.9% annual increase, bringing the average price to £237,045. This growth rate outpaces the UK market average of 4.8%, highlighting the region’s appeal due to its relative affordability. The West Midlands also saw robust growth, with prices rising by 5.5% to an average of £257,982. The area remains a popular choice for property investors and first-time buyers seeking more affordable alternatives to southern England.
London, although experiencing slower growth than the national average, reported a 3.5% annual increase. The average property price in the capital now stands at £545,439, reflecting its sustained appeal despite higher entry costs.
Market Activity Surges
According to HMRC, seasonally adjusted residential property transactions reached 100,410 in October 2024, marking a 9.5% increase from September and a 21% year-on-year rise. Quarterly transaction data also showed a 3% uptick, emphasizing the growing momentum in the market. Mortgage approvals, as reported by the Bank of England, have also risen, signaling renewed buyer confidence. The Royal Institute of Chartered Surveyors (RICS) noted a 12% increase in new buyer enquiries and a 9% rise in agreed sales in October. New instructions from sellers were up 14%, reflecting a healthy supply-demand balance.
Prime market slows; mainstream market gains
The prime property market, including high-end areas in London, is experiencing slower growth compared to the mainstream market. This is due to fewer needs-based buyers in the top-priced segment. However, the broader market is benefiting from increased buyer activity and affordability improvements, underpinned by strong wage growth and competitive mortgage rates.
Expert Insights and Future Projections
Nicky Stevenson, Managing Director at Fine & Country, highlighted the housing market’s resilience despite challenges such as inflation and the Autumn Budget. She noted that rising prices and increased activity reflect a shift in typical seasonal patterns, with buyers pushing to finalize transactions before the April 2025 tax changes. While the tax increases and potential economic uncertainty could dampen purchasing power in the new year, experts remain optimistic about the market’s trajectory. Zoopla forecasts a 2.5% rise in house prices and a 5% increase in transactions by 2025, driven largely by first-time buyers. Higher incomes and lower mortgage rates are expected to improve affordability, further supporting growth.
A Positive Outlook for 2025
As the UK property market enters 2025, strong demand, improving affordability, and favorable market conditions signal continued growth, despite challenges. The combination of policy changes, economic stability, and buyer confidence is expected to sustain momentum, making the housing market a focal point for investors and homebuyers alike.
