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Highlights:
- House Prices Rise 4.8%: Average property prices in the UK reached a record high of £298,083 in 2024, supported by easing financial pressures and robust wage growth.
- Mortgage Demand Soars: Falling mortgage rates and improved buyer confidence drove loan demand to its highest level in two years.
- Market Stability Forecast for 2025: Halifax anticipates modest house price growth of up to 3% and a slight increase in transaction volumes in the coming year.
Halifax’s annual housing market review for 2024 has highlighted a 4.8% rise in property prices, defying earlier predictions of stagnation. The average house price reached a record £298,083, marking a significant recovery from subdued activity at the start of the year.
Easing Pressures and Wage Growth Drive Recovery
According to Amanda Bryden, Halifax’s head of mortgages, the robust performance was driven by easing financial pressures and a strong year for wage growth. These factors contributed to renewed buyer confidence, with many households able to reassess their affordability amid falling mortgage rates.
Bryden noted, “The market remained largely flat until the summer, with most of that growth concentrated in the second half of the year.” This late-year momentum, coupled with increased mortgage availability, helped push transaction volumes back to pre-pandemic levels.
Falling Mortgage Rates Boost Buyer Confidence
One of the primary drivers behind the rebound was the decline in mortgage rates, which dropped by up to 160 basis points compared to the peaks seen during the 2022-2023 period. The reduced borrowing costs not only lowered monthly payment obligations for buyers but also widened access to loans. This surge in loan demand marked the highest levels seen in two years and was instrumental in supporting price growth across the housing sector.
Outlook for 2025: Modest Growth Expected
Looking ahead, Halifax anticipates the housing market will continue its upward trajectory, albeit at a more measured pace. The bank forecasts a modest house price growth of up to 3% in 2025, reflecting a stable economic environment and sustained demand for property. Transaction volumes are also expected to see a slight increase, indicating continued interest from buyers as the market normalizes further.
Halifax’s optimistic outlook underscores the resilience of the UK’s housing market in navigating a complex economic landscape, with ongoing improvements in financial conditions likely to provide additional support in the year ahead.
