House prices in the UK are higher than a year ago in every region and are expected to continue rising into 2025, despite the possible dampening effects of recent budget changes.
According to property search website Zoopla, average house prices have risen by 1.5 percent in the past twelve months.
A pronounced north-south divide has emerged, with prices in the northern regions – which are generally more affordable – rising significantly faster than those in and around London, where property is more expensive and more sensitive to interest rate changes. In Northern Ireland, house prices have risen by 6.3 percent on last year, while the south-east of England has seen a modest gain of just 0.3 percent.
Zoopla expects house prices to rise by 2.5 per cent over the course of 2025, in line with forecasts from other sector analysts. Richard Donnell, executive director of Zoopla, noted that “income growth this year was stronger than we expected”. Combined with a drop in mortgage rates, this has improved affordability for potential buyers.
In addition to prices rising in 2025, Donnell estimates there will be 1.15 million housing transactions – a 5 percent increase compared to this year. However, affordability pressures are expected to continue in the South East and London, with southern housing markets likely to lag behind their northern counterparts.
Donnell noted that his forecasts for the coming year would have been more optimistic had there not been “budget changes,” which he said will “act as a brake on price inflation.”
From April 2025, more buyers will face higher stamp duties. Zoopla estimates that around half of people moving today pay stamp duty, but this figure is expected to rise to above 80 per cent by the spring. The share of starters who have to pay stamp duty from April will probably double to 40 percent.
Zoopla data shows the market is busier than normal as potential buyers look to complete transactions before the tax changes come into effect. The number of sales agreed is up 19 percent compared to this time last year, and buyer demand has increased by 25 percent.