Price sensitive buyers have returned to the market

House prices have returned to growth, with the average house price at £267,500 in November, 1.9% higher than a year ago. Average prices are increasing across all regions and countries, ranging from 0.7% in the South East to 6.8% in Northern Ireland.

However, buyers have become more price-sensitive since the Autumn Budget, agreeing sales priced at 3.6% below the asking price, up from 3.2% in July. As of mid-December, Zoopla’s data shows buyer demand was up 21%, sales agreed have increased 23%, while the flow of new stock is up 18%.

Zoopla is forecasting house price growth of 2.5% in 2025 and 1.15 million transactions, up from 1.1 million in 2024. Richard Donnell, executive director at Zoopla, noted that many buyers and sellers returned to the housing market in 2024 after delaying moves due to higher mortgage rates, with many hoping to avoid higher stamp duty costs from next April.

This resurgence is further supported by data from Rightmove, which reports that despite the usual December slowdown, activity remains substantially stronger than the same period a year ago, with the number of sales being agreed up by 22%, and new buyer demand up by 13%. Rightmove predicts that new seller asking prices will rise by 4% next year, with forecast mortgage rate drops set to further improve affordability and stimulate market activity.

In summary, the UK housing market has seen a significant return of price-sensitive buyers in 2024, leading to increased sales activity and a return to house price growth. With forecasts predicting continued growth in 2025, the market appears poised for a strong performance in the coming year.