House prices continue to rise all over the UK (Image: Getty)
The price of the average home in the UK will grow by 2.5 per cent next year.
Online estate agent Zoopla also predicted house sales would grow five per cent over 2025 to 1.15m across all regions and countries of the UK.
Regionally, house prices in the Midlands, Northern England, Scotland and Wales will outperform the UK average, while prices in southern England will lag behind.
Zoopla said housing affordability had been helped by a strong growth in household incomes over the last two years.
Sales agreed over the last four weeks across the UK were up 19 per cent year-on-year and buyer demand was 25 per cent higher.
Zoopla said postponed home moves, an ageing population, rising running costs and changing working patterns will continue to impact moving decisions, in addition to the desire to seek a better home or location.
First-time buyers will remain the largest buyer group, supporting housing chains and helping existing homeowners to move.
Last year Zoopla said UK homes were over-valued by 16 per cent as a result of the jump in rates. Rising incomes and lower rates over 2024 have removed this over-valuation without the need for prices to fall further in 2024.
Over the last four weeks the fastest price rises were in the Oldham, OL, postcode where they were up 3.7 per cent.
Wigan, postcode WN, saw prices rise 3.9 per cent, while in Belfast, BT, they rose 6.5 per cent.
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Price falls were recorded in pockets of southern England led by Ipswich, IP, down -1.1 per cent, Truro,TR, down -1.2 per cent and Dartford, DT, down -1.2 per cent.
Incomes will need to grow faster than prices to improve affordability, with house prices likely to grow in southern England over 2025 and into 2026, Zoopla added.
Highest and lowest year-on-year house growth by region and postal area
|
Highest House price growth |
Lowest house price growth |
|||
|
Region |
Postal area |
YoY – % change |
Postal area |
YoY – % change |
|
East Midlands |
Nottingham (NG) |
1.8% |
Lincoln (LN) |
0.3% |
|
Eastern |
St Albans (AL) |
1.0% |
Ipswich (IP) |
-1.1% |
|
London |
Ilford (IG) |
1.6% |
West London (W) |
-0.7% |
|
North East |
Durham (DH) |
3.7% |
Teesside(TS) |
1.8% |
|
North West |
Wigan (WN) |
3.9% |
Crewe (CW) |
1.9% |
|
Scotland |
Falkirk (FK) |
3.5% |
Aberdeen (AB) |
-0.3% |
|
South East |
Slough (SL) |
1.2% |
Canterbury (CT) |
-0.6% |
|
South West |
Plymouth (PL) |
1.5% |
Dorchester (DT) |
-1.2% |
|
Wales |
Swansea (SA) |
2.2% |
Llandrindod Wells (LD) |
0.6% |
|
West Midlands |
Wolverhampton (WV) |
3.1% |
Telford (TF) |
1.1% |
|
Yorkshire and the Humber |
Wakefield (WF) |
3.5% |
York (YO) |
0.7% |
Richard Donnell, executive director at Zoopla comments: “The housing market has been resilient in the face of higher borrowing costs over the last two years. Higher income growth and lower rates have helped reset housing affordability faster than many expected over 2024. This has supported an increase in the number of sales and house prices over the year which we expect to continue over 2025.
“House price growth in southern England will continue to lag the UK average and incomes will need to rise faster than prices to help reset affordability and price more households into the market.
“First-time buyers will remain an important buyer group but existing homeowners looking to move will need more support to help realise their ambitions, with more and more having to look further afield to find better value for money.”
Matt Thompson, head of sales at estate agency Chestertons, added: “As we are approaching the end of the year, we are already seeing more buyers entering the market which is not typical for this time of year and a strong indication that 2025’s property market will be buoyant. One reason for the uplift in buyer activity are changes to stamp duty, announced in the Autumn Budget. These will come into effect in April 2025, driving first-time buyers in particular to get on the property ladder before that deadline and will fuel a busy start to next year’s property market.”