ONS House Price Index – Thoughts from the Industry
Main points of the ONS House Price Index for February
- Average UK private rents increased by 8.7% in the 12 months to January 2025 (provisional estimate); this is down from 9.0% in the 12 months to December 2024.
- Average rents increased to £1,375 (8.8%) in England, £780 (8.4%) in Wales and £995 (6.2%) in Scotland, in the 12 months to January 2025.
- In Northern Ireland, average rents increased by 8.3% in the 12 months to November 2024.
- In England, rents inflation was highest in London (11.0%) and lowest in Yorkshire and The Humber (5.3%), in the 12 months to January 2025.
- Average UK house prices increased by 4.6%, to £268,000, in the 12 months to December 2024 (provisional estimate); this annual growth rate is up from 3.9% in the 12 months to November 2024.
- Average house prices increased in England to £291,000 (4.3%), in Wales to £208,000 (3.0%) and in Scotland to £189,000 (6.9%), in the 12 months to December 2024.
Here are some thoughts from the Industry.
Nathan Emerson, CEO of Propertymark:
“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.”
“Increases in rental prices across the UK have been an ongoing concern and our member agents continue to emphasise key issues regarding the continuous trend of lack of rental stock versus an ever-growing number of tenants looking for homes.
“Selling up altogether or turning to the short-term letting market is becoming a more attractive option for landlords due to the challenging legislative changes and increased financial liabilities they face.
“It’s crucial that a healthy mix of homes of all types and tenures is encouraged throughout the entire UK. Governments across all nations have made various pledges regarding housing building targets, however, a crucial factor to ensure is that good landlords providing secure and decent homes to the nation are supported and not penalised.”
Gareth Atkins, Managing Director of Lettings:
“Foxtons’ analysis of new listings in the London rental market reveals a slight increase from this time last year, but a 55% increase in available properties compared to the same period of 2023 – highlighting a notable expansion in supply. While the coming spring market should bring an uptick in demand, the substantial growth in supply is contributing to increased competition among available properties. The London Lettings market is therefore looking as if it will stabilise as we move into the spring offering predictability for both renters and landlords.”
Jean Jameson, Chief Sales Officer at Foxtons:
“January was a strong month for sales, with activity levels rising across key metrics. Buyer demand has continued to grow, with viewing enquiries up 11%. This is tempting sellers back into the market as we see a rise in both new instructions and asking prices. Demand for one and two-bed properties was particularly high, driven by first-time buyers eager to move ahead of the April stamp duty change. With further base rate cuts expected and positive sentiment holding firm, 2025 is set to be a year of opportunity for buyers and sellers alike.”
Ross Turrell, Commercial Director at CHL Mortgages:
“Today’s data adds to a growing list of reasons for optimism about the UK property sector. With annual growth holding strong at 4.6% and the Bank of England’s recent rate cut fuelling demand, there is a real sense that market activity is ramping up. As a result, buyers and investors are showing renewed confidence, and market momentum is building.
“However, while the outlook is positive, there is no room for complacency. The surge in transactions ahead of changes to Stamp Duty thresholds is a reminder that challenges remain, including regulatory pressures that could add complexity to investors’ plans in the months ahead.
“Lenders must therefore continue to take a pragmatic and flexible approach. While demand is high, brokers and borrowers still require support, particularly as rates remain elevated. Ensuring borrowers can access the right solutions will be key to maintaining momentum and supporting their long-term goals.”
Paresh Raja, CEO of Market Financial Solutions:
“There will be mixed emotions across the property industry today. While house prices continue their impressive upward march, this morning’s data showing another rise in inflation will likely trigger concerns around potentially higher interest rates for borrowers.
“For now, those concerns should be tempered by the fact the Bank of England had already warned that inflation would rise to close to 4% by the middle of this year, and yet it still opted to cut the base rate earlier this month. This suggests the Bank sees rising inflation as a temporary trend rather than a major economic issue, which could allow for further rate cuts in the coming months, in turn injecting yet more positivity into a property market that, as today’s ONS house price index underlines, has already performed remarkably well over the past year in spite of economic and political turbulence.”
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