The housing market returned to growth across all regions this month, with prices also forecast to rise in 2025 “despite budget headwinds,” according to the latest Zoopla house price index.
The average house price rose by 1.5% to £267,200 in November compared to a year ago, the property website says.
Overall, the home market returned to growth in 2024, with UK house prices posting an average rise of 1.5% from last October, up from a 1.2% fall a year ago.
All UK regions and countries recorded positive year-on-year growth, with the fastest price gains registered in Northern Ireland, at 6.3%, and the North West region, at 2.9%.
However, home price growth remains below 1% across southern England “where affordability pressures are an ongoing drag” on prices.
The report points out that agreed sales over the last four weeks are up 19% year-on-year, with buyer demand 25% higher over the same period.
It says the sales market is on track for 1.1m sales completions in 2024 – 10% higher than in 2023.
“Sales completions over 2025 will be supported by a robust sales pipeline, 30 per cent larger than this time last year, which is expected to deliver a strong start in the first few months of next year,” according to the study.
The report “expects the number of sales to increase by 5% over 2025 increasing to 1.15 million.
“Postponed home moves, an ageing population, rising running costs and changing working patterns will continue to impact moving decisions, in addition to the desire to seek a better home or location.”
Rising incomes have “helped to reset housing affordability” over the last year in the face of higher borrowing costs, it adds.
The report points to data from the Office for Budget Responsibility, which shows household disposable incomes rose by 15% between the second quarter of 2022 and the second quarter of 2024.
While house prices grew by just 1.5% over the same period, “a trend that has helped to repair housing affordability without the need for additional support from a fall in house prices”.
The property website’s survey says: “Last year Zoopla reported that UK homes were over-valued by 16% as a result of the jump in mortgage rates.
“Rising incomes and lower mortgage rates over 2024 have removed this over-valuation without the need for prices to fall further in 2024.
“This means the housing market has largely adjusted to higher mortgage rates, opening up the opportunity for continued modest growth in house prices which are expected to increase by 2.5% over 2025 assuming mortgage rates average 4.25% over the year ahead.”
Zoopla executive director Richard Donnell adds: “The housing market has been resilient in the face of higher borrowing costs over the last two years.
“Higher income growth and lower mortgage rates have helped reset housing affordability faster than many expected over 2024.
“This has supported an increase in the number of sales and house prices over the year which we expect to continue over 2025.”
NAEA Propertymark President Toby Leek points out: “With interest rates easing and affordability improving, many buyers will have increased confidence and may be presented with better mortgage offers compared to what they were seeing at the start of the year in order to make their next home purchase a reality.
“The market is set to see a continued spike in homes for sale and serious buyers coming to the fore despite winter months historically being a quieter time due, in part, to many people across England and Northern Ireland wanting to complete before the rises to Stamp Duty commence from April 2025.”
