Explore the 4.7% rise in UK house prices for 2024, highlighting the northern regions’ impressive growth compared to their southern counterparts.
In a remarkable turn of events, the UK housing market has demonstrated an unexpected resilience, concluding 2024 with a notable 4.7% increase in house prices compared to December 2023. This growth, while impressive, still leaves prices slightly shy of the all-time high recorded in the summer of 2022, as reported by Nationwide’s December house price index. The data reveals a month-on-month increase of 0.7%, following a robust 1.2% rise in November, suggesting a sustained upward trajectory.
The regional dynamics of this price growth are particularly intriguing. Northern regions have outperformed their southern counterparts, with Northern Ireland leading the charge with a staggering 7.1% annual increase. Scotland and Wales also reported commendable growth rates of 4.4% and 2.7%, respectively. In contrast, England as a whole saw a more modest 3.1% rise, with the North emerging as the best-performing English region, boasting a year-on-year increase of 5.9%. Southern England, on the other hand, experienced a more subdued growth of 2.2%, with the South West achieving the highest increase among southern regions at 2.7%. Notably, East Anglia lagged behind, recording a mere 0.5% annual increase.
Despite the ongoing affordability challenges that potential buyers face, the mortgage market has exhibited surprising vigor throughout 2024. High house prices relative to average earnings have created significant barriers for first-time buyers, exacerbated by soaring rental costs that have hindered savings efforts. For those fortunate enough to have saved for a deposit, the burden of monthly payments remains daunting, with typical mortgage rates for a 25% deposit hovering around 4.5%—a stark contrast to the 1.5% rates seen in late 2021.
Encouragingly, the latter part of 2024 witnessed a resurgence in housing market activity, with mortgage approvals for house purchases surpassing pre-pandemic levels. Anticipated changes to stamp duty are expected to induce volatility, as buyers rush to finalize transactions before the impending tax alterations at the end of March 2025. This rush is likely to result in a spike in transactions in the first quarter of 2025, particularly in March, followed by a potential lull in activity in the subsequent months, mirroring patterns observed after previous stamp duty adjustments.
As we embark on 2025, the housing market stands at a critical juncture, navigating the complexities of tax reforms alongside broader economic trends. The unexpected price increases in December defied traditional seasonal slowdowns, driven by a surge in demand as buyers sought to secure advantageous deals ahead of the April 2025 stamp duty changes. While regional disparities in price growth persist, with some areas experiencing increases exceeding 17%, the overall market remains robust and dynamic.
Looking ahead, the urgency surrounding pre-April transactions may dissipate, potentially fostering a more balanced market. Rising living costs and inflation could prompt buyers to adopt a more cautious approach, yet this environment may simultaneously present opportunities for those entering a market that could shift in favor of buyers later in the year. Should demand wane due to a decrease in active buyers, sellers may feel compelled to adjust their pricing strategies, creating advantageous conditions for those still engaged in the market.
While the UK housing market faces a myriad of challenges, including tax reforms and economic pressures, the long-term demand for housing remains steadfast. As we navigate the complexities of 2025, both real estate buyers and sellers will need to adapt, seeking opportunities amidst uncertainty and striving for a more balanced housing landscape in the years to come.
