Average UK house prices increased by 4.6%, to £268,000, in the 12 months to December, up from 3.9% in the 12 months to November, according to the UK House Price Index from the ONS.
Average house prices increased by 4.3% England, 3.0% in Wales, and 6.9% in Scotland.
The North East was the English region with the highest house price inflation in the 12 months to December, at 6.7%, up from 6.4% in the 12 months to November.
Annual house price inflation was lowest in London, at 0.0% in the 12 months to December, down from 0.5% in November.
Richard Donnell, executive director at Zoopla, commented: "Latest data from the ONS shows a strong growth in house prices driven by increased sales activity over 2024 and a stamp duty rush in the final quarter of 2024. We expect the rate of growth in the ONS index to slow over 2025 due to much greater choice of homes for sale, up 11% on last year and higher stamp duty costs for most buyers from April. While the rate of inflation has increased, we don't expect much change in average mortgage rates. Additionally, it's positive that average earnings continue to rise faster than house prices, helping to reset housing affordability and improve access to the market."
However, Richard Harrison, head of mortgages at Atom Bank, believes house prices will continue to rise over 2025. He said: “The latest ONS figures underline what a strong year 2024 was for house price growth, with prices rising at their fastest rate since February 2023. Even with the unwelcome news of resurgent inflation, it is unlikely that 2025 will be much different. Recent data out from Rightmove suggests the gap between supply and demand has narrowed, but it’s still there, pushing prices ever higher. Record high house prices have become the norm, and I expect this trend to continue.
“Those hoping to purchase a home will have welcomed the cut to base rate, a move which has already fed through into lower mortgage rates from many lenders. While today’s inflation news may reduce the chance of a cut in March, the expectation of additional cuts to come this year, coupled with the increasing availability of higher LTV mortgages, will be further encouragement for those buyers."
Ross Turrell, commercial director at CHL Mortgages, added: “Today’s data adds to a growing list of reasons for optimism about the UK property sector. With annual growth holding strong at 4.6% and the Bank of England’s recent rate cut fuelling demand, there is a real sense that market activity is ramping up. As a result, buyers and investors are showing renewed confidence, and market momentum is building.
“However, while the outlook is positive, there is no room for complacency. The surge in transactions ahead of changes to stamp duty thresholds is a reminder that challenges remain, including regulatory pressures that could add complexity to investors’ plans in the months ahead."
