Silke Mayr UK house prices grew by 4.7% in 2024, with the average home costing £269,426 by December. Northern Ireland led regional growth, while affordability pressures and upcoming 2025 changes weigh on buyers.
The UK housing market displayed remarkable resilience in 2024, as house prices rose by 4.7%, according to Nationwide. By the end of December, the average UK home price reached £269,426, though values remain below their summer 2022 peak.
Regional and Property Trends
Terraced homes recorded the fastest price growth, while Northern Ireland led regional increases. Northern England also outpaced southern regions, although all areas experienced price rises. These trends highlight regional disparities in the UK housing market, driven by local demand and affordability.
To explore how property investments can align with regional growth trends, “The Complete Guide to Property Investment“ by Rob Dix, available on Amazon, offers valuable insights. This comprehensive book provides practical advice on navigating the UK housing market, making it a helpful resource for prospective buyers and investors.
2025 Changes and Their Impact
The upcoming year presents uncertainty for buyers and sellers due to shifting mortgage rates and new stamp duty rules. Starting April, stamp duty exemptions will reduce, affecting first-time buyers significantly. The threshold for standard buyers in England and Northern Ireland will drop to £125,000 from £250,000, while the first-time buyer exemption will decrease to £300,000 from £425,000.
These changes are expected to drive a short-term surge in sales before April, followed by a slowdown. Holly Tomlinson, a financial planner, emphasized that the updated stamp duty rules will add further challenges for first-time buyers already grappling with affordability issues.
Mortgage Rates and Affordability Outlook
Falling mortgage rates and rising wages may ease affordability in 2025. UK Finance forecasts a 10% increase in mortgage lending for house purchases, reflecting optimism about the market. However, analysts remain cautious, citing uncertainties in interest rate trends and their impact on borrowers.
For fixed-rate mortgage holders, who make up 80% of the market, challenges persist. The Bank of England estimates that by 2027, 4.4 million borrowers will see their payments rise by an average of £146 per month as fixed deals expire. Even if interest rates drop, they are unlikely to return to current low levels.
Nationwide’s chief economist, Robert Gardner, noted that high house prices relative to earnings and record rental growth continue to hinder many prospective buyers from saving deposits. Meanwhile, the forthcoming Halifax housing report is expected to provide additional insights into market trends.