December is an interesting month in the property calendar. It’s a time when we look back at the year just gone and speculate about the 12 months ahead. December 2024 was also a month where serious buyers and sellers didn’t succumb to Christmas distractions.
A snapshot provided by Rightmove revealed home moving activity in December 2024 was substantially stronger than December 2023. The number of sales was up 22% year-on-year, with new buyer demand increasing 13%. At the end of the year, the portal’s average asking price was £360,197.
Asking price versus final sales figure
It’s important to note that Rightmove concentrates on asking prices. The final Halifax House Price Index to be published in 2024 showed the UK’s average property value was £298,083. This figure is based on mortgage transaction data.
House prices forecast to rise
As for 2025, house prices look set to continue their gentle ascendency. Rightmove, Zoopla, MPowered Mortgages, Nationwide, the Office for Budget Responsibility and Capital Economics agree that the UK’s average property value will rise. Predictions range from a 1.1% increase to a bullish 5%.
As well as UK average house prices, all eyes will be on the Bank of England (BofE) in 2025. Financial analysts were quick to predict what might happen to the base rate over the next 12 months. Goldman Sachs expects the base rate to drop to 2.75%, while Santander was more cautious, forecasting a lower base rate of 3.75%. In December, the BofE held the base rate at 4.75%.
Zoopla closed the year out with its December 2024 Rental Index. The last 12 months have been a year of modest increases, with rents up 3.9% year-on-year. The portal says the average rent for new lets in the UK is now £1,270 per month.
In contrast, the most recent analysis from the Office for National Statistics (ONS) says rents are rising at 8.7% a year. The discrepancy lies in the data that is used. While Zoopla uses rents that are agreed when a vacant rental is re-let, the ONS uses costs for all privately renting tenants, including those whose rent changes during a tenancy.
Landlords and tenants will be eager to know what 2025 holds. We should see the Government’s private rental sector reforms start taking hold, and this may affect the supply/demand imbalance. Rent predictions, therefore, should be taken at face value.
Rents continue to climb
Zoopla says average UK rents are expected to rise 4% in 2025. There is a high chance of regional variations, however. The portal expects large cities and London to post the smallest rent increases, while rents will rise strongly in affordable areas.
December also saw the Government in England further clarify its property offering, specifically concerning new homes. Labour backtracked on its proposal to deliver 50% affordable housing at new ‘grey belt’ projects. Instead, it will allow housebuilders to deliver 15% more affordable homes than in the local housing policy – up to a cap of 50%.
Easier and quicker house building ahead?
In a bid to reach its ambitious 1.5 million house building target, the English Government said planning officers could approve development applications without permission from council committees. This would be on the provision that proposals were in keeping with local plans and the National Planning Policy Framework. The move was widely praised by house builders.
There were also announcements by Welsh and Scottish ministers in December. Wales’s draft Budget set out a 1% increase in Land Transaction Tax for landlords, with the higher rate taking immediate effect. The Scottish Government increased its Additional Dwelling Supplement to 8% on 5th December 2024.
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