Rental market continues to grow
UK house prices rose by 3.4% in the 12 months to October 2024, up from 2.8% annual growth in September, according to the latest government data.
The average house price in October was £292,000, an increase of £10,000 compared to the same month last year.
Regionally, England’s average house price increased to £309,000 (up 3%), while prices in Wales rose to £222,000 (up 4%). Scotland saw the largest increase among the home nations, with house prices climbing to £197,000 (up 5.5%). Northern Ireland experienced the highest growth overall, with average house prices reaching £191,000 in the year to the third quarter of 2024, up by 6.2%.
Monthly changes in house prices were also positive, based on the ONS Private Rent and House Price data. On a non-seasonally adjusted basis, prices increased by 0.2% between September and October 2024, a reversal from the 0.5% decline seen during the same period last year. On a seasonally adjusted basis, house prices rose by 0.5% month-over-month.
Across English regions, the North East recorded the strongest annual price growth at 4.7%. London posted the weakest increase, with prices rising by just 0.2% over the year to October 2024.
Average UK house prices increased by 3.4%, to £292,000 in the year to Oct 2024, this annual growth was up from 2.8% in the 12 months to Sept 2024.
— Office for National Statistics (ONS) (@ONS) December 18, 2024
Average UK private rents increased by 9.1% in the year to Nov 2024, this is up from 8.7% in Oct 2024.
➡️ https://t.co/VqY15GKZkD pic.twitter.com/a5jByAeBhD
“Today’s figures will provide investors with a little more festive cheer,” said Ross Turrell (pictured left), commercial director at specialist lender CHL Mortgages. “In the face of challenging economic and political headwinds, the steady house price growth seen throughout 2024 highlights the enduring resilience of bricks-and-mortar investments in the UK.
“These figures reflect market activity during the uncertain lead-up to the Autumn Budget, so the fact that prices still grew should drive greater confidence and higher activity levels in the coming weeks.”
Nick Leeming (pictured centre), chairman of property sales and letting company Jackson-Stops, commented that the final few weeks of 2024 have provided the market with stable footing for a busier year ahead.
“While a continued stream of announcements from the government benched around housebuilding and planning permission promise to bring greater supply to the market, sellers continue to hold a slight advantage as we head into next year,” Leeming said.
Looking ahead, Turrell said there should be plenty of reasons for optimism.
“Nationwide predicts that house prices will rise by 4% in 2025, while Savills anticipates a 3.5% uptick in rental prices over the next 12 months,” he added.
“That said, with the Bank of England likely to hold the base rate tomorrow, property investors will need to consider their plans based on the current cost of borrowing. More positively, it is expected the bank will cut rates multiple times in 2025, which should boost the market – this is supported by the fact that new buyer demand is up by 13%, according to Rightmove.”
Meanwhile, the rental market also showed continued acceleration, with average UK private rents rising by 9.1% in the 12 months to November 2024, up from 8.7% in October.
Average rents increased to £1,362 (9.3%) in England, £772 (8%) in Wales, and £980 (6.5%) in Scotland. Northern Ireland recorded a 9% increase in rents in the year to September 2024.
Within England, London led rental inflation with a 11.6% annual increase, while Yorkshire and The Humber saw the slowest growth at 5.7%.
“The rental market remains under intense pressure, with demand significantly outpacing supply,” noted Alex Upton (pictured right), managing director of specialist mortgages and bridging at Hampshire Trust Bank. “Without a notable increase in supply – and that doesn’t appear imminent – this imbalance will continue driving rents higher. I fully expect to see new rental records set in 2025.”
Upton added that despite the Stamp Duty changes announced in the Budget, property investment remains highly appealing, especially for those specialising in refurbishment or conversion projects.
“These strategies not only help maximise rental yields but also make better use of existing housing stock to meet the strong demand for quality homes,” she pointed out. “With limited progress on new builds, unlocking the potential of existing properties will be key to meeting tenant needs in the year ahead.”
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