UK housing market expands by 6.3% to £379bn

The UK housing market returned to growth in 2024 – increasing by £22.3bn in size.

Related topics:  House prices,  Housing market
Rozi Jones | Editor, Financial Reporter
17th March 2025
Sold house sign

The UK housing market returned to growth in 2024, driven by a £22.3 billion increase in spending on house purchases, according to research by property firm Savills. 

Overall, the total value of the UK housing market has expanded by 6.3% in 2024 to £379 billion. This equated to 1.1 million transactions at an average sale price of £343,822. 

At a regional level, the greatest percentage increase in spending was seen in Northern Ireland (+13.4%), though it still only accounts for 1.4% of the total size of the housing market (£5.1bn).  

London saw just a 2.3% increase in spend, as the size of its housing market (£72.8bn), fell below that of the South East (£74.5bn) for the first time in two years.

Use of debt vs equity 

A £22.3bn increase in spending on house purchases was driven by a £24.3bn increase in the use of mortgage debt (+18.1%). But while the equity put down by mortgaged buyers rose by £6.3bn (+9.5%), spending among cash buyers fell by £8.4bn (-5.4%), meaning cash and equity fell to 58% of the total spend on housing.

The greatest increase in mortgage debt was among first-time buyers (+£12.2bn or +21.4%), which was fuelled by higher transaction levels and a slight easing in the average loan-to-value.  

Lucian Cook, head of residential research at Savills, commented: “Total spending on UK house purchases shifted back into positive territory in 2024 as stability returned to the mortgage markets.

“While the total size of the housing market is below its pandemic peak of £521 billion, it remains £36bn larger than immediately before the pandemic. Further interest rate cuts expected this year will mean that the range of buyers coming to the market will widen, and we can expect to see their spending power pick up over the next 12 months.

“The rise in first-time buyers reflects the overwhelming desire of Britons to get a foot on the housing ladder. Especially given the lack of choice in the private rented sector, and the double-digit rental growth tenants have experienced over the past few years.

“As a result, those who have been able to pull together a deposit have continued to take the plunge, despite higher house prices and mortgage rates.

“Clearly with ambitious housebuilding targets, the government would like to see a stronger recovery in the size of the housing market. With constraints on public finances, it looks like that will need to be rooted in relaxation in mortgage regulations to further increase first-time buyer activity. Meanwhile, an improvement in activity among home movers is heavily dependent on further cuts in interest rates and an improvement in consumer confidence."

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