UK Housing Market in 2024: What's in Store for 2025?

2024: A Year of Surprising Strength

Despite ongoing affordability challenges, the UK housing market ended 2024 on a high note. House prices rose by 4.7% compared to December 2023, nearly reaching their all-time peak from summer 2022. The market showed particular strength in the final months, with a 0.7% increase in December following a robust 1.2% rise in November.

Regional Winners and Variations

The story of 2024 was very much a tale of North versus South:

• Northern Ireland led the pack for the second consecutive year with an impressive 7.1% price growth
• The North of England showed strong performance with a 5.9% increase
• Scotland maintained steady growth at 4.4%
• Wales saw a modest but stable 2.7% increase
• East Anglia brought up the rear with just 0.5% growth

Property Types: Who Won in 2024?

Different property types saw varying levels of success:

• Terraced houses topped the charts with 4.4% growth
• Flats made a comeback with 4.0% growth - their best performance since 2021
• Semi-detached homes rose by 3.4%
• Detached properties increased by 3.2%

Looking Ahead: What to Expect in 2025

Stamp Duty Impact

The first quarter of 2025 is likely to see significant activity as buyers rush to complete purchases before stamp duty changes take effect. Expect:

• A surge in transactions during Q1, especially in March
• A quieter period in the following 3-6 months
• Some price volatility as the market adjusts

Price Growth Predictions

The market is expected to settle into a more sustainable pattern. Price growth is likely to fall into the 2-4% range. This will happen after the initial stamp duty-related fluctuations Growth will be supported by:

• Gradually easing interest rates
• Continued wage growth
• Steady economic recovery

Market Fundamentals

Several factors will influence the market in 2025:

• Affordability should improve as earnings outpace house price growth
• Interest rates are expected to moderate
• The market is likely to see steady, sustainable growth rather than dramatic changes

Key Takeaways for Buyers and Sellers

If you're planning to enter the market in 2025:

• Consider timing around stamp duty changes if you're buying
• Watch for regional variations - northern regions continue to show strength
• Keep an eye on interest rates, as they'll impact affordability
• Consider property types carefully - different segments perform differently