"2024 was a year when UK property prices once again defied expectations, rising by 4.8% on an annual basis, to now sit at a record high of £298,083."
- Amanda Bryden, head of Halifax Mortgages
The UK housing market beat expectations in 2024, with recovery supported by lower mortgage rates and strong wage growth, according to new analysis from Halifax.
Its data shows that property prices hit a record high of £298,083 this year following annual growth of 4.8%, with transaction volumes returning to pre-pandemic levels.
Annual house price growth was at its strongest level since November 2022. Property prices fell on a monthly basis only once during 2024, dropping by 0.9% in March.
Prices for homes bought by first-time buyers rose by 4.1% over the last year (to £234,361), while the amount paid by home-movers increased by 5.0% to £356,491.
Northern Ireland saw the highest rate of annual property price inflation of any UK region or nation in the year to November 2024 at 6.8%. The slowest annual growth was in Scotland at 2.8%.
Halifax says affordability has improved over the year but continues to be a challenge for many buyers, with a decline in interest rates widely expected to be slower, impacting those who are yet to refinance older, existing deals.
It predicts modest house price growth in the range of 0% to 3% in 2025, along with a further small increase in the number of transactions.
Amanda Bryden, head of Halifax Mortgages, said: “2024 was a year when UK property prices once again defied expectations, rising by 4.8% on an annual basis, to now sit at a record high of £298,083. The market remained largely flat until the summer, with most of that growth concentrated in the second half of the year.
“Two key factors have driven the recovery in the housing market over the last 12 months. The first is lower mortgage rates, at times up to 160 basis points below the peaks of 2022 and 2023.
“Second is that income growth continues to catch up with the consumer price increases of the past few years. For new mortgages, monthly costs as a percentage of earnings fell from 33% to 29% over the last year.
“This easing financial pressure has boosted buyer confidence as demand for mortgages reached its highest level in more than two years, with volumes now back in line with pre-pandemic levels, having trailed by around 20% at the start of the year.
“The uneven availability of properties for sale across the country, relative to demand, also continues to underpin prices. Higher mortgage rates compared to a few years ago may have made some homeowners hesitant to sell, to avoid triggering an immediate increase in their monthly mortgage cost when they move. Additionally, new build completions were at their lowest level since 2018, excluding the pandemic lockdown periods.
“Looking ahead to 2025, despite the positive trends we’ve seen over recent months, there’s no doubt mortgage affordability remains a challenge for many buyers.
“While further cuts to Bank Rate are still on the cards, the pace looks likely to be more gradual than previously anticipated, and many homeowners with older fixed-rate deals ending next year face refinancing at much higher rates.
“But with employment conditions remaining positive, buyer demand should continue to hold up well. We expect modest house price growth in 2025, likely a little lower than this year at up to 3%, along with a further small increase in the number of transactions.”
