UK house price inflation stood at 2% at the end of December, up from 0.9% a year ago and the fastest growth rate since April 2023, Zoopla reveals.
Zoopla’s data found the average UK house price stands at £267,700, representing an increase of £5,200.
The fastest growth in average house prices is in Northern Ireland (7.7%), where prices are rebounding off a low base, followed by North West England (3.2%).
The North West of England, Scotland and Northern Ireland have recorded faster employment growth over the last two years than the regions of southern England.
Locally, prices are rising the fastest in Wigan in the North West (5.6%) and Motherwell in Scotland (4.9%).
Southern regions of England are recording the lowest rates of house price inflation, below 1.5%.
The recent boost to FTB demand is more concentrated in London and South East England and we expect this to support near-term price inflation in these regions.
The latest house price index found that the number of homes for sale is 10% higher than this time last year.
The average estate agent branch had 31 homes for sale – the highest January total for seven years.
Demand is also 13% higher than this time last year and 26% higher than at the start of 2023.
Meanwhile, sales agreed are up 12% as some buyers attempt to beat the reduced stamp duty deadline at the end of March.
This year has started off better than in 2024 and 2023, which Zoopla says “bodes well for market activity over the rest of the year, supported by evidence of more people looking to move”.
Zoopla forecasts that average UK house prices will rise by 2.5% in 2025, with 5% more sales taking place than last year, at 1.15m.
It suggests that rising incomes and base rate cuts are set to continue to improve housing affordability over 2025.
Zoopla executive director of research Richard Donnell says: “2025 is off to a better start than the previous two years. This bodes well for market activity over the rest of the year and supported by more people looking to buy in the next two years.”
Finova sales director John Tilzey explains: “There’s no denying that the housing market has shown incredible resilience in 2024, supported by falling mortgage rates, rising wages, and easing inflationary pressures – all of which have played their part in alleviating pressure on affordability.”
“As shown by today’s data, prices are gathering steam, marking a significant turnaround from this time last year. But as we look ahead to the year, the big question of ‘what’s next’ for the housing market remains.”
“Government plans to raise the stamp duty threshold and anticipated rate cuts should sustain demand, although price growth will likely remain modest with borrowing costs still higher than a few years ago.”
“Lenders and brokers naturally have a big role to play here, as the path to market stability is still uncertain. Right now, customers are seeking flexible and forward- thinking products, exploring joint borrower sole proprietor options and the increasingly popular 95% LTV mortgage to give them a crucial leg up onto the property ladder.”
Legal & General Mortgage Services managing director Kevin Roberts adds: “We’re seeing an increase in market activity partly driven by a rise in first-time buyers looking to get on the ladder and older buyers returning to the market, who may be motivated to take advantage of the current Stamp Duty Tax thresholds.”
“Our broker data shows that the volume of first-time buyers searching for mortgages has more than doubled since 2023, and this encouraging growth in borrower confidence may well continue this year.”
“The market terrain is altogether more stable than it was in 2024, and we could see more base rate cuts this year, bringing further relief to borrowers.”
