UK Housing Market Update: December 2024

House price growth has stabilised across much of the UK in December, following a year of modest recovery. According to leading property indices, the average UK house price now sits at around £285,000, reflecting a slight annual rise of 1.5%. The North East and Midlands continue to outperform other regions, with stronger demand for affordable housing options and consistent buyer activity.

London, on the other hand, remains subdued due to affordability constraints, although prime areas in central London have seen renewed interest from international buyers.

Increased Housing Supply Eases Pressure

One significant trend in December 2024 has been the increase in housing supply. More properties have come to market over the last quarter, helping to ease pressure on buyers and leading to improved affordability in some areas. Sellers are recognising the importance of realistic pricing, which has helped transactions move more efficiently in a traditionally slower month.

This increase in supply is good news for buyers, offering greater choice, particularly in regions like the North West, Yorkshire, and parts of Scotland.

Mortgage Market: A Turning Point

The mortgage market has seen positive developments as interest rates stabilise following the highs of the past two years. Lenders are offering increasingly competitive fixed-rate mortgage deals, helping to restore buyer confidence.

Mortgage approvals in December 2024 have hit their highest levels since mid-2022, with first-time buyers leading the way. For many, the stabilising of rates has presented an opportunity to step onto the property ladder after a prolonged period of uncertainty.

Energy Efficiency Remains a Key Focus

Buyers are placing greater emphasis on energy-efficient homes as utility costs continue to influence purchasing decisions. Properties with an Energy Performance Certificate (EPC) rating of C or above remain in high demand, with many homeowners upgrading insulation, heating systems, and appliances to meet evolving buyer expectations.

Government incentives for improving energy efficiency are also expected to boost market activity into the new year.

The Rental Market Continues to Thrive

The rental market remains a key area of strength, with demand for rental properties remaining exceptionally high, particularly in cities and university towns. In places like Newcastle, Manchester, and Leeds, tenant competition has driven rents upward, a trend that is expected to persist into early 2025.

Landlords who offer high-quality, well-maintained properties are seeing strong yields, further reinforcing rental investments as a reliable option in a shifting market.

Looking Ahead to 2025

As we close 2024, the outlook for the UK housing market in 2025 appears cautiously optimistic. Key trends to watch include:

• Continued mortgage rate stability leading to improved affordability.
• Regional growth, particularly in the North and Midlands.
• An increasing focus on energy-efficient homes.
• A further rise in housing supply, supporting a more balanced market for buyers and sellers.

For both buyers and sellers, working with experienced estate agents will be key to navigating the market effectively and securing the best outcomes.

Final Thoughts

December 2024 has provided much-needed stability for the UK housing market. With a combination of improved affordability, growing supply, and steady buyer demand, the market is well-positioned for a positive start to 2025. Whether you’re looking to buy, sell, or invest, the months ahead could present an ideal opportunity to make your move.

Stay tuned for more updates and insights as we head into the new year!