Housing sales end 2024 on a high – London Wallet

Buyers and sellers returned to the market in 2024 having delayed moving decisions in the face of higher mortgage rates. More homes for sale boosted choice and sales have grown year on year with the last four weeks seeing sales agreed 23% up on last year as buyers try to agree deals ahead of the stamp duty changes from April 2025.

There are 283,000 sales agreed working their way through to completion in the first half of 2025, this is the largest sales pipeline in four years, worth £104bn. This is an increase of 30% compared to this time last year.

More sales have also helped house prices return to growth in 2024. Annual house price growth was 1.9 per cent in the 12 months to November 2024, compared to -1.2% a year ago. The average UK house price stands at £267,500. House price growth ranges from 0.7 per cent in the South East to 6.8% in Northern Ireland and 3.5% in the North West region.

Buyers have become more price-sensitive in recent weeks in the wake of the Budget and growing uncertainty over the outlook for mortgage rates which have drifted higher.

This means that buyers are now agreeing sales at 3.6% below the asking price. Over the summer of 2024, buyers were more confident as mortgage rates fell, agreeing purchase prices that were, on average, 3.2% below the asking price.

The size of the gap between asking prices and agreed purchase prices is a lead indicator of house price growth. The gap between the asking and agreed sales price peaked at 4.6% in late 2023 resulting in modest price falls, while in 2021 during the pandemic buyers had to pay the asking price to secure a sale.

It remains a buyer’s market and signs of increased caution amongst home buyers will keep UK house price growth in check over 2025.

North-south divide set to continue in 2025

Zoopla expects UK house prices to increase by 2.5% over 2025 with an ongoing north-south divide resulting in lower house price growth in southern England and higher growth in other regions. This is due to the relative affordability of housing across the country and how much house prices have risen relative to household incomes.

House prices in London have risen by 83% since 2010, followed by 70% across southern regions of England, 66 per cent across the Midlands and 56% in Wales. At the other end of the spectrum average house prices are just 19 per cent higher in Northern Ireland, 30% higher in Scotland and 41% higher in northern regions of England, providing room for house price growth.

Housing market predictions for 2025

The outlook for the housing market in 2025 will be dictated by the strength of the economy and labour market and the trajectory for mortgage rates, all set within the context of the relative affordability of homes across the UK.

Zoopla expects mortgage rates to remain at current levels and buyers are likely to remain price-sensitive in the face of increased uncertainty regarding the economy and the impact of the budget on the jobs market. Zoopla forecasts a 2.5 per cent increase in house prices over 2025 and 1.15m housing sales, up from 1.1m in 2024.

Richard Donnell, executive director at Zoopla, commented: “Buyers and sellers returned to the housing market in 2024 having delayed moves in the face of higher mortgage rates. There is a sizable pipeline of sales that will complete in the first half of 2025 with many hoping to avoid higher stamp duty costs from next April.

“More sales have supported a return to house price growth across the country but home buyers have become more price-sensitive in recent weeks as mortgage rates drift higher. Affordability constraints will keep the pace of house price growth in check over 2025 but there will be enough price inflation to support 5% more home moves.”