UK Housing Market Rebounds: Prices Rise Despite Economic Headwinds.

Zoopla’s latest house price index reveals a positive outlook for the UK housing market. Despite economic challenges, house prices across all regions have grown in 2024.

Key findings from the report:

  • Price Growth: The average UK house price increased by 1.5% to £267,200 in November 2024 compared to the previous year.
  • Regional Performance:
    • Northern Ireland and the North West experienced the most significant price gains, with 6.3% and 2.9% increases, respectively.
    • While still seeing positive growth, Southern England remains below 1% due to ongoing affordability pressures.
  • Increased Sales Activity: Agreed sales have risen by 19% year over year, and buyer demand is up 25%.
  • Projected Sales: The UK housing market report forecasts 1.1 million sales completions in 2024, a 10% increase from 2023. This trend is expected to continue into 2025, with a projected 5% increase to 1.15 million sales.
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Driving Factors:

  • Rising Incomes: Increased household disposable incomes have helped to improve UK housing affordability.
  • Lower Mortgage Rates: Decreasing mortgage rates has further eased affordability concerns.
  • Market Adjustment: The housing market has largely adjusted to higher mortgage rates, reducing the need for significant price drops.

Industry Insights:

Richard Donnell, Zoopla’s Executive Director, stated, “The UK housing market has shown resilience in the face of higher borrowing costs. Increased income growth and lower mortgage rates have accelerated the improvement in housing affordability, supporting both sales and price growth.”

Toby Leek, President of NAEA Propertymark, noted, “With interest rates easing and affordability improving, buyers are gaining confidence and may benefit from better mortgage offers. The market is poised for a surge in home sales, even during the typically quieter winter months.”

UK housing market looking Ahead:

While the UK housing market has shown remarkable resilience, factors such as an ageing population, rising living costs, and changing work patterns may influence future trends.

However, the current positive momentum and improved affordability position the market for continued growth in the coming year.