UK house prices rose by 3.3% in the 12 months leading up to November, according to the Land Registry index. The average house price in November stood at £290,000, which is £10,000 higher than the same time last year. While property prices showed growth over the year, there was a slight dip of 0.4% between October and November 2024.
Darrell Walker, director of sales and distribution at ModaMortgages, a buy-to-let lender, commented on the figures, noting the market’s resilience. He remarked, “Given the uncertainty that surrounded the market heading into the Autumn Budget, the 0.4% drop in house prices between October and November 2024 is not surprising. However, it’s important to highlight that the annual increase remains strong at 3.3%, showing the housing market’s resilience in the face of economic and political challenges faced by homebuyers and investors in 2024.”
Jason Tebb, president of OnTheMarket, a property portal, attributed some of the market’s stability to the two interest rate cuts in the latter half of last year. He said, “These cuts have had a positive knock-on effect on confidence, which is critical for the market. With inflation dropping slightly to 2.5%, it’s moving in the right direction, albeit slowly. If this trend continues, it will reduce pressure on the Bank of England, which may delay further rate cuts.”
The Land Registry house price index, calculated by the Office for National Statistics, provides official data that covers both mortgaged properties and cash purchases. However, it tends to lag behind other indices, such as those from Nationwide, Halifax, and Zoopla. For example, the Nationwide index has already published data for the entirety of 2024, reporting a 4.7% increase in house prices last year.
In this blog, we take a closer look at the Land Registry index to explore which regions and property types saw the strongest growth, and we also examine whether house prices are likely to continue rising in 2025.
House price growth by region
In the 12 months leading up to November 2024, average house prices in England saw a modest increase of 3%, reaching a new average of £306,000. This growth in property prices is a continuation of a trend observed in recent years, with many regions in England experiencing steady increases. Wales mirrored this growth, also recording a 3% rise in house prices, bringing the average property price there to £219,000. This figure suggests a healthy, consistent property market in Wales, despite some of the challenges that have affected the broader UK housing market.
In contrast, Scotland experienced slightly higher annual inflation, with property prices increasing by 4.7%. This brought the average cost of a home in Scotland to £195,000. The higher increase in Scotland may be indicative of a different market dynamic, possibly driven by factors such as limited housing stock or regional demand outpacing supply in certain areas.
For Northern Ireland, the data provided by Land & Property Services Northern Ireland showed a remarkable 6.2% increase in house prices for the year leading up to Q3 2024 (July to September), with the average house price rising to £191,000. This growth rate in Northern Ireland is noteworthy, reflecting a robust property market, which may be due to local economic conditions, population growth, or a rebound from previous slower growth periods.
Breaking it down further by English regions, the North East of England recorded the highest annual house price inflation, with prices increasing by 5.9% in the 12 months to November. This was the strongest performance across England, reflecting a buoyant property market in the region, where demand may be outpacing supply in key cities and towns. Following closely behind were the North West and Yorkshire and The Humber, both seeing a 5.7% rise in house prices. These regions have also benefitted from economic growth and investment, with increasing demand for housing in urban centres and surrounding areas.
However, not all regions experienced such positive growth. London, traditionally the UK’s most expensive housing market, recorded the lowest annual house price inflation, with a slight drop of 0.1%. London’s property market has faced numerous challenges in recent years, including economic uncertainty, changes in the tax landscape, and a shift in buyer preferences. As a result, it was the only English region to experience negative annual inflation, suggesting that the capital’s property market may be undergoing a period of adjustment.
The South East of England, another traditionally high-growth area, saw the second lowest growth rate in the country. House prices in the South East rose by just 1.4%, a much slower pace than other regions. This could be due to various factors, such as high property prices already limiting affordability, changes in buyer demand, or external economic pressures. Despite the relatively low growth, the South East remains one of the most sought-after areas in the country, especially for commuters working in London or other major urban centres.
Overall, the housing market in the UK remains diverse, with varying growth rates across regions. While some areas experience strong growth, others are beginning to show signs of stagnation or even decline. Factors such as local economic conditions, housing supply, and regional demand will continue to influence property prices across the country. As we look ahead to 2025, it will be interesting to see how these regional trends develop, particularly in light of broader economic factors such as interest rates and inflation.
House price growth by property type
It comes as no surprise that detached houses remain the most expensive property type in the UK, with an average price of £436,949. These spacious homes, often located in sought-after areas, command a premium price due to their size and the privacy they offer. On the other hand, flats and maisonettes are the most affordable, with an average price of £233,230, making them a popular choice for first-time buyers or those looking for more budget-friendly options.
Looking at the strongest growth in property prices over the 12 months to 2024, the Land Registry highlights that terraced houses have experienced the most significant increase. The average price of a terraced home rose by 4.7%, from £231,796 to £242,598. This growth may be attributed to rising demand in urban areas where terraced properties are often more accessible and offer a good balance between space and location.
Semi-detached homes also saw notable growth, with average prices increasing by 4.3%. This type of property has long been a popular choice for families looking for more space while still being affordable in comparison to detached homes. Flats and maisonettes experienced a more modest increase of 2.1%, likely reflecting the challenges of rising living costs and demand for smaller properties. Meanwhile, detached properties saw a more gradual increase of 1.5%, reflecting the steady demand for these high-value homes.
The Land Registry data also provides insight into the price differences between first-time buyers and those who have already owned a home. In November, first-time buyers in Great Britain paid an average of £244,519 for their homes, indicating that they are entering the market at a lower price point. In contrast, former owner-occupiers, who are more likely to have larger budgets or access to greater equity, paid an average of £332,626. This price difference highlights the challenges faced by first-time buyers in an increasingly competitive housing market, where affordability remains a significant concern.
What’s the outlook for house prices in 2025?
The future of house prices is heavily reliant on mortgage rates, which are, in turn, influenced by swap rates. Recently, turmoil in the gilt market has caused swap rates to rise, leading some lenders to increase their fixed mortgage rates. This uptick in rates has added to the ongoing challenges surrounding affordability.
Tebb, from OnTheMarket, commented on the situation, saying, “Affordability remains a challenge, with several lenders raising rates in recent days due to higher swap rates, but there has not been significant repricing.” The rising rates signal that the market is still adjusting, but it hasn’t yet seen substantial shifts.
Jonathan Samuels, CEO of Octane Capital, offered his perspective on the current outlook. He noted that the situation remains somewhat uncertain, particularly as interest rates haven’t fallen as quickly as anticipated over the last six months. “In fact, mortgage rates remain higher than they were at this time last year. Those looking to purchase are best advised to tread with caution and avoid over-borrowing in hopes of beating the stamp duty deadline.”
Looking ahead, many experts believe that the anticipated change in stamp duty thresholds will trigger a surge in housing market activity. This could potentially drive house prices higher in the coming months. As of 1 April, the tax-free stamp duty threshold will revert from £250,000 to £125,000, which may add thousands of pounds to the cost of moving home. Additionally, the threshold for first-time buyers will drop from £425,000 to £300,000.
Mark Harris, CEO of mortgage broker SPF Private Clients, suggests that with the stamp duty concessions set to end in March, this could motivate buyers to act quickly in the early months of the year. He believes this may result in a busier spring market as buyers rush to complete their purchases before the deadline.
However, once the stamp duty changes take effect, many experts predict a potential market correction. This could see reduced transaction numbers and weaker house price growth. The remainder of the year will likely be shaped by fluctuations in mortgage rates, government measures that may impact the market, and other economic factors, such as inflation and wage growth. These elements will play a crucial role in determining the direction of the housing market as 2025 approaches.
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