January Market Update

The last month of 2024 continued the theme of the other 11 – with a set of property announcements that would either have immediate impact or shape the future sales and lettings market. There was also a slew of predictions for house prices and rental values in 2025. Here are 12 things we learnt in December.

1) Sales pipeline hit 4-year high: the final Zoopla house price index of 2024 revealed the number of sales agreed in the conveyancing process was at a four-year high. Looking at December specifically, the volume of sales agreed in 2024 was 23% higher than in December 2023.

Heavyweights agree on house prices

2) Values edge upwards: both Zoopla and Halifax agreed that house prices had risen in 2024. The portal noted an increase of 1.9% over the last 12 months, with the UK’s average property value ending the year at £267,500. The figures differed at Halifax, who noted a 4.8% annual increase with the average UK property costing £298,083.

Annual rent increase quantified

3) Slow but steady: although the smallest annual rental increase for three years, rents in 2024 ended the year higher than they started. A year-on-year hike of 3.9% leaves the average rent for new lets in the UK at £1,270 per month.

4) North/ South divide evident: looking at rental increases on a regional level, Zoopla identified a general North / South discrepancy. The strongest four regions for rental growth in 2024 were Scotland, the North West, the North East and Northern Ireland. The weakest was London, with the South West and the South East all well behind their Northern counterparts.

5) House price predictions looking positive: no December is complete without a round of house price predictions for the year ahead. Taking a myriad of forecasts from mortgage lenders, agents, economists and portals into account, house prices may rise by an average of 3.19% in 2025.

6) Rental value forecast shows increases ahead: according to Zoopla, annual rents have risen by £3,240 in the last three years. Could increases be sustained for another year? The portal thinks so, with newly agreed tenancies rising in cost by 4% in 2025.

Bank of England holds firm

7) No change in December: after a year of inflation and base rate decreases, there was hope that the Bank of England would deliver borrowers an early Christmas present. Instead, the committee decided to hold the base rate at 4.75% in December.

8) Affordability to remain stable: Nationwide’s House Price Review & Outlook for 2025 paints a quiet year ahead. It thinks ‘modestly lower interest rates and earnings that outpace house price growth’ will help ease affordability constraints. For the record, the lender expects house prices to rise between 2-4% in 2025.

9) More new homes in the planning: the Government’s 1.5 million new homes target will be made more achievable in 2025 thanks to a revised National Planning Policy Framework. Key adjustments include an amended affordable housing requirement and a new power that will allow planning officers to approve development applications without permission from committees of councillors.

Wales & Scotland follow England

10) Welsh landlords affected overnight: in December, the Welsh Cabinet Secretary made property purchases more expensive for landlords. Mark Drakeford announced a 1% increase in Land Transaction Tax would take immediate effect.

11) Stamp duty change in Scotland: the Scottish Government also made its latest stamp duty revision in December. Additional Dwelling Supplement (ADS) increased to 8% as part of the 2025-2026 Scottish Budget. The change took effect on 5th December 2024.

If you would like to know more about your local property market, please get in touch.