The property sector is looking forward to an upbeat 2025 with the latest UK house price data revealing another strong month across the country.
UK house prices continue to climb at a healthy pace, according to the latest report from property portal Rightmove, which revealed a 1.7% month-on-month rise in January.
It means the average property has seen its value increase by £5,992, bringing the UK average asking price to £366,189 – the biggest monthly jump in prices since 2020.
There has also been a renewed surge in activity from sellers, demonstrating a high level of confidence in the sector, with 11% more new homes coming to the market than there were this time last year, according to Rightmove. The average number of homes on the books per estate agency has also hit a 10-year high for the time of year, meaning the country could be in for an especially busy year for sales.
For buyers and investors, this means more choice than in 2024, with a better balance between prospective buyers and the number of properties on offer. What this could also mean is that buyers can be more discerning when it comes to choosing their property, opting for better presentation or higher build quality.
UK house price rises led by north
As has been the theme for many months, the north of England is continuing to outperform the south when it comes to UK house price increases.
The North East of England has seen the biggest annual gains across all UK house price results, according to Rightmove’s research, with values jumping by 6.2% year-on-year, and a 2.5% monthly increase, which is a healthy level above the average.
Yorkshire and the Humber follows with a 3.8% annual house price hike, with the North West also recording an above average yearly increase of 2.9%. However, these regions retain some of the lowest property prices in the country, making them a popular place to buy among property investors and those with lower budgets, including first-time buyers.
Keeping an eye on interest rates
Mortgage interest rates will be under scrutiny across the property sector, as they remain one of the biggest causes for hesitation and uncertainty among both buyers and sellers, as well as affecting the property investment landscape and UK house prices.
UK inflation recently eased to 2.5%, which has boosted expectations that the Bank of England will lower its base rate next month, which currently sits at 4.75%.
However, according to the latest figures from Money Facts, average fixed rate deals fell between December and January, with the average two-year fixed rate mortgage now charging 5.48%, with the average five-year deal sitting at 5.25% – which is the shortest gap between the two options for around three years.
Colleen Babcock, property expert at Rightmove, said: “Rightmove’s early-year snapshot shows a promising start to 2025. However, the market needs a boost for that momentum to be sustained, in the form of early and ongoing Bank Rate cuts, which should hopefully help to reduce mortgage rates. Some further support for first-time buyers would also be welcomed, particularly in more expensive areas of the country.”
If mortgage rates fall over the course of this year, this is expected to support UK house price growth thanks to better affordability.
A better year than 2024
One agent based in the North West, Jordan Halstead, CEO at Jordan & Halstead Estate Agents in Chester, said he had “high hopes for a strong year in 2025, with a larger pipeline of sales compared with the start of last year”.
He added: “We expect a solid first three months in exchanges and completions. After the cold snap we’ve just had, viewings, offers and sales being agreed are picking up again at a solid rate.”
Jordan also noted that sellers were listening to the agency’s valuation recommendations “more than previously”, indicating more realistic expectations of the market along with an understanding that mortgage costs are higher than they were a few years ago.
“Lending is still a challenge with uncertainty in interest rates, but there is still hope mortgage rates will come down. This is causing some buyers to hesitate, hoping they will get a better deal.
“All in all, we expect a better year than 2024, but know that challenges are still ahead, with a lot riding on the government and Bank of England being consistent in their approach.”
If you’re looking for your next property investment opportunity to take advantage of the positive trends in UK house prices, get in touch with BuyAssociation today to find out about our current and upcoming projects.