Halifax UK Housing Market Review And Outlook For 2025

  • UK housing market beat expectations in 2024, with recovery supported by lower mortgage rates and strong wage growth
  • Property prices hit a record high of £298,083 following annual growth of +4.8%, with transaction volumes returning to pre-pandemic levels
  • Affordability has improved but continues to be a challenge for many buyers, with a decline in interest rates widely expected to be slower, impacting those who are yet to refinance older, existing deals
  • Modest house price growth in the range of 0% to +3% is expected for 2025, along with a further small increase in the number of transactions
  • As with recent years, forecast uncertainty remains high given the current economic environment

 

Amanda Bryden, Head of Halifax Mortgages said:
“2024 was a year when UK property prices once again defied expectations, rising by +4.8% on an annual basis, to now sit at a record high of £298,083. The market remained largely flat until the summer, with most of that growth concentrated in the second half of the year.

“Two key factors have driven the recovery in the housing market over the last 12 months. The first is lower mortgage rates, at times up to 160 basis points below the peaks of 2022 and 2023.

“Second is that income growth continues to catch up with the consumer price increases of the past few years. For new mortgages, monthly costs as a percentage of earnings fell from 33% to 29% over the last year.

“This easing financial pressure has boosted buyer confidence as demand for mortgages reached its highest level in more than two years, with volumes now back in line with pre-pandemic levels, having trailed by around 20% at the start of the year.

“The uneven availability of properties for sale across the country, relative to demand, also continues to underpin prices. Higher mortgage rates compared to a few years ago may have made some homeowners hesitant to sell, to avoid triggering an immediate increase in their monthly mortgage cost when they move.

“Additionally, new build completions were at their lowest level since 2018, excluding the pandemic lockdown periods.

“Looking ahead to 2025, despite the positive trends we’ve seen over recent months, there’s no doubt mortgage affordability remains a challenge for many buyers.

“While further cuts to Bank Rate are still on the cards, the pace looks likely to be more gradual than previously anticipated, and many homeowners with older fixed-rate deals ending next year face refinancing at much higher rates.

“But with employment conditions remaining positive, buyer demand should continue to hold up well. We expect modest house price growth in 2025, likely a little lower than this year at up to +3%, along with a further small increase in the number of transactions.”

Key facts and figures:

  • The average UK house price is now £298,083 compared to £284,442 a year ago, a rise of £13,641. That’s a record high, with the last peak prior to 2024 being in June 2022 (£293,507).
  • Annual house price growth is +4.8% (year to November), its strongest level since November 2022. Property prices fell on a monthly basis only once during 2024, dropping by -0.9% in March.
  • Property prices for homes bought by first-time buyers rose by +4.1% over the last year (to £234,361), while the amount paid by home-movers increased by +5.0% (to £356,491).
  • Northern Ireland saw the highest rate of annual property price inflation of any UK region or nation in the year to November 2024 at +6.8%. The slowest annual growth was in Scotland at +2.8%.
  • The typical UK house price has increased by +56% over the last decade (£191,238 in November 2013), a rise of £106,845. Average property prices are £58,907 (+24.6%) higher than at the onset of the pandemic (£239,176 in March 2020).

EAN Breaking News

Breaking News from the team at Estate Agent Networking. Have a new story to share with us? Then please get in contact today! When and where we can we will refer to third party websites with a 'live link back' where news was released first.

You May Also Enjoy

Planning disputes on new build land
Estate Agent Talk

Planning consultations for major infrastructure to be streamlined

Robert Bruce, a planning and infrastructure partner at law firm Freeths LLP, said he: “Welcomed the change as a significant step to speeding up the DCO process and the focus on the quality and effectiveness of the consultation, rather than box ticking and a risk averse approach to pre-application consultation due to the current legal…
Read More
Breaking News

‘The property ladder pulls further away’ warns Open Property Group

For many first-time buyers across England, the dream of homeownership continues to slip further out of reach. Despite rising wages, soaring house prices are making it harder than ever to get on the property ladder. A leading UK professional house buying company ‘Open Property Group’ based in Buckinghamshire UK, has raised concerns over the ongoing…
Read More
Estate Agent Talk

How Long It Takes to Buy a House in the UK: 5 Common Delays That Can Slow Down Your Home Purchase

Wondering how long it takes to buy a house in the UK? The average timeline ranges from 8 to 22 weeks, but even that can stretch significantly due to unexpected delays, especially if you’re a first-time buyer or caught in a chain. That’s why working with experienced professionals like Belvoir — one of the UK’s…
Read More
Love or Hate Rightmove
Breaking News

Rightmove to host Renters’ Rights Bill webinar with Guild of Lettings

Rightmove is hosting a live and interactive webinar session with the Guild of Lettings to help agents get Renters’ Rights Ready. The webinar will take place from 10:00am – 11:00am on Wednesday 23rd April. Susie Crolla, Managing Director for the Guild of Lettings, will be joining Rightmove to help agents with questions they may have about…
Read More
Breaking News

Mortgage completions surged 50 per cent in March amid race to avoid higher stamp duty

March saw highest volume of mortgage completions recorded since September 2021 Homebuyers report now needing an additional £13,530 on top of the property price to cover taxes and fees Three in four have seen housing costs rise, up £126 on average per month Renters’ confidence in their ability to purchase a property within five years…
Read More
Love or Hate Rightmove
Breaking News

Average two-year fixed mortgage rate for 60% LTV now cheaper than five-year rate

The average two-year fixed mortgage rate for those with a 40% deposit (60% LTV) is now cheaper than the average five-year fixed equivalent, the first time this has happened since the mini-Budget The average two-year fixed, 60% LTV mortgage rate is now 4.18%, while the five-year equivalent is 4.19% The gap between average two-year fixed…
Read More