"The real indicator of market health is the annual rate of growth and, with house prices increasing by 4.6% over the course of last year, the market has performed very well indeed"
- Verona Frankish - Yopa
The latest ONS figures released this morning have shown that average UK house price annual inflation was 4.6% (provisional estimate) in the 12 months to December 2024, up from the revised estimate of 3.9% in the 12 months to November 2024.
The average UK house price was £268,000 in December 2024 (provisional estimate), which is £12,000 higher than 12 months ago.
National breakdown
Average house prices in the 12 months to December 2024 increased in England to £291,000 (4.3%), increased in Wales to £208,000 (3.0%) and increased in Scotland to £189,000 (6.9%). The average house price increased in the year to Q4 (Oct to Dec) 2024 to £183,000 in Northern Ireland (9.0%).
On a non-seasonally adjusted basis, average UK house prices decreased by 0.1% between November 2024 and December 2024 compared with a decrease of 0.8% in the same period 12 months ago. On a seasonally adjusted basis, average house prices in the UK increased by 0.3% between November 2024 and December 2024.
Of English regions, annual house price inflation was highest in the North East, where prices increased by 6.7% in the 12 months to December 2024. London was the English region with the lowest annual inflation, where prices were unchanged (0.0%) in the 12 months to December 2024.
Richard Donnell, Executive Director at Zoopla comments: "Latest data from the ONS shows a strong growth in house prices driven by increased sales activity over 2024 and a stamp duty rush in the final quarter of 2024. We expect the rate of growth in the ONS index to slow over 2025 due to much greater choice of homes for sale, up 11 per cent on last year and higher stamp duty costs for most buyers from April.
"While the rate of inflation has increased, we don't expect much change in average mortgage rates. Additionally, it's positive that average earnings continue to rise faster than house prices, helping to reset housing affordability and improve access to the market.
"The rental market continues to be stuck in a supply/demand imbalance which is keeping an upward pressure on rents. Zoopla data shows there are 22 per cent more homes for rent than a year ago but availability remains below the pre-pandemic period.
"The ONS rental index tracks the value of all rented homes and remains high at 8.7% as the recent rapid growth in rents impacts the market. Zoopla's latest index for new lets shows rents have slowed to four per cent, down from eight per cent a year ago. Rental growth has slowed more rapidly in London, down to less than two per cent for new lettings.
"The pace at which rents rise across all existing rented homes is slower and reflected in the ONS index which shows how rents are re-aligning across the wider market. Once this has worked through the market the ONS will also register slower rent inflation."
Nathan Emerson, CEO of Propertymark, said, “With house prices remaining buoyant, this indicates that the wider economy continues to stabilise, and people are feeling confident in their personal financial positions. We have also witnessed interest rates track downward steadily since last summer and will hopefully see continued progression heading further into the year, should the Bank of England feel confident that conditions are safe to consider further base rate dips.
“With governments across all UK nations planning on building more new homes at scale over the coming years, if done effectively, this should help even out house prices and supply across the entire country.
“Alongside this, as confidence and affordability in the housing market continue to grow, and as homeowners witness enhanced levels of equity within their properties, we expect affordability pressures to further ease, allowing more aspiring and current homeowners to make their next home move.”
CEO of Yopa, Verona Frankish, commented, “We saw a second consecutive reduction in the monthly rate of house price growth during December, but this is to be expected given the seasonal slowdown that comes due to the Christmas break.
"The real indicator of market health is the annual rate of growth and, with house prices increasing by 4.6% over the course of last year, the market has performed very well indeed.
"This is despite the fact that the nation’s buyers are continuing to contend with far higher borrowing costs than they’ve become accustomed to in recent years. However, we’ve already seen one interest rate reduction so far in 2025 and it’s shaping up to be a year of even greater positivity where the property market is concerned.”
Director of Benham and Reeves, Marc von Grundherr, said, “The UK property market has demonstrated a great deal of resilience, with the market moving forward at pace in 2024, despite the wider economic uncertainty that engulfed much of last year.
"In London, house price growth remained static on an annual basis following a year of greater stagnation due to higher borrowing costs and higher house prices.
"However, the general consensus is that we’ve very much turned a corner now and 2025 is set to be a year of positive momentum across the capital’s property market.”
CEO of Octane Capital, Jonathan Samuels, commented, “The latest figures show that the property market has performed strongly over the last year and this improving market sentiment will have been buoyed by the base rate cut seen already in 2025.
"However, with inflation rearing its head again today and to its highest level in almost a year, the nation’s homebuyers and movers could be waiting that little while longer before the Bank of England cuts rates again.
"The good news is that this is unlikely to impact current market momentum and 2025 still looks set to be one of upward growth for the UK property market.”
