House Prices going into 2025

[Twiglets1]

We often refer to House Price Indexes (HPIs) in discussions re house prices but there are several out there so which to use?

If you want to know average asking prices use the Rightmove HPI and the price will be for the entire-market in England & Wales.

If you want to know average selling prices it's either the Halifax or Nationwide HPIs but they only have data on buyers who have mortgages approved with them in the UK, so cash buyers for example will be excluded.

The Office for National Statistics HPI is arguably the most accurate as it publishes sold prices on all transactions in the UK (mortgages & cash). However, there is a delay so the data is at least a couple of months behind.

Anacdata HPI also covers mortgage & cash transactions and is the first to report regional monthly selling prices, but only covers England & Wales.

I think exactly the same.

Did read somewhere (can’t remember where) that London prices will start to accelerate in 2025 due to more people being called back into office. Not sure if that will happen or not. At the moment of course London is the worst performing region for property price rises. Will be interesting to see whether that’s still the case by December 2025.

I think stagnation but perhaps a softening of prices as the economy is looking a little shaky & more people will be coming off fixes plus people who are newer entrants to the market & want to move up won’t have much in equity. This is from a London perspective though where prices have been pretty flat for a while now.

Do you think the VAT on school fees will disrupt the London/SE market where assume many families are already highly geared?

I don’t know… It could have a detrimental effect on affordability. Or it could increase prices in catchment areas for good state schools if more parents make the decision to switch from the independent sector.

@Tikityboo I don’t think in any significant numbers to have an impact. I’ve often read on MNs about people buying cheaper houses with bad state schools & then going private but I don’t see that reflected in real life, many of my neighbours pay to live near great state schools but still chose private, often at some distance. Plus London has falling school rolls so catchments have increased in many schools. It may impact some of the outer boroughs which are still “affordable” and have good state options but I think that’s equally because inner London is becoming unaffordable to many so families are getting pushed out.

https://schoolsweek.co.uk/falling-rolls-the-true-cost-of-declining-school-populations/

It doesn't surprise me that people with kids are leaving London. Anecdotally they all seem to be coming to Birmingham! Probably around 75% of parents I've met since having a baby have moved out of London or the SE within the last 5 years. Pushing our ruddy prices up in the nicer bits of our city though.

I bet parents in Manchester, Bristol, Sheffield etc... would tell you the same.

@LGBirmingham I pretty sure I read in the last year that Manchester has seen large influxes of young people and many choosing to stay rather than leaving after uni & I think this has been reflected in the house prices there over the last few years. Bristol has always attracted leavers. During & post Covid I lost a lot of friends/school mums/neighbours who left London, I almost did leave myself but I’m a Londoner as is DH & parents are getting older so it made sense to stay.

It’s quite common for people to leave after primary particularly for people who didn’t grow up in London but I think Covid brought it forward & then affordability has pushed others out plus a lot less social housing now.

I honestly don't know how people could afford to have Children in London these days. It's probably the preserve of the exceptionally wealthy now or those where the tax payer funds it.

I'm always reading threads on here where families with household incomes of over 150k+ are struggling to make ends meet. They list their expenses and all their take home pay is basically gone in child care and mortgage. It seems pretty unworkable to work for a living and have a family there.

I don’t know anyone including myself who hasn’t had help in some form eg living at home free, cash gift, help with childcare or a combo. And I’m talking significant help.

The area I lived in underwent extreme gentrification & the demographics changed considerably, I sold my flat to a parent buying it for their child & it was the 4th on the street to go in that manner. The excellent local primary which used to have a 300 metre catchment for years has spaces because the recent influx chose private from day 1. It’s gone from a fairly diverse typical London street to a very narrow demographic.

Nationwide HPI: Strong end to the year for UK house prices

• UK house prices up 4.7% year on year in December
• Northern regions see higher price growth than southern regions
• Northern Ireland best performing area for second year running, with prices up 7.1% over 2024
• East Anglia weakest performing region, with prices up 0.5% over the year

All regions saw house price growth in 2024
“Our regional house price indices are produced quarterly, with data for Q4 (the three months to December) indicating that all regions saw price rises over 2024.
“Northern Ireland was the best performing area for the second year running, with prices up 7.1% over the year. Scotland recorded a 4.4% increase in 2024, whilst Wales saw a 2.7% year-on-year rise.
“Across England overall, prices were up 3.1%, compared with Q4 2024. There was a clear north-south divide in house price performance in 2024 as Northern England (comprising North, North West, Yorkshire & The Humber, East Midlands and West Midlands) continued to outperform southern England, with prices up 4.9% year on year. The North was the best performing English region, with prices up 5.9% year on year.

Property type review
“Our most recent data by property type reveals that terraced houses have seen the biggest percentage rise in prices over the last year, with average prices up 4.4% in 2024.
“Flats saw a recovery in price growth, recording their best year since 2021, with a 4.0% rise. Semi-detached properties recorded a 3.4% annual increase, while detached properties saw a 3.2% year-on-year rise.
“However, if we look over the longer term, detached homes have continued to have a slight edge over other property types, most likely due to the ‘race for space’ seen during the pandemic. Indeed, since Q1 2020, the price of an average detached property increased by nearly 27%, while flats have only risen by c15% over the same period.”

https://www.nationwidehousepriceindex.co.uk/reports/strong-end-to-the-year-for-uk-house-prices

So much for the house price crash that keeps being predicted!

Well I've seen a lot of January reductions around here (East/West Midlands border), many properties don't seem to be selling very fast at all. I've been watching in the area for a couple of years now and circumstances mean that we will definitely be buying this year, probably our final home. I was hoping prices might have dropped more, tbh, but the good thing is we've been able to save quite a bit.

Does anyone know how often Nationwide update their projections? We remortgage this year.

Just for context, we have a mortgage with them and I can get an estimation from them through mortgage manager, but I find it to be quite a conservative estimate considering what is selling near by, it's much lower than than when I try the calculator on their website but our house was a new build (5 years ago) so I assume that is factored in.

Zoopla is about 15% higher but I know that is to be taken with a huge pinch of salt and we wouldn't get the averaged estimate they advertise.

Yes I think it’s a buyers market in most areas for sure. Hope 2025 is the year you are able to move and get something good. Helps to have a healthy deposit.

House prices where I am have risen dramatically.

We had to leave London as we were priced out of renting in the end, despite both working and having housing benefit top up.

We ended up moving to the place in the West Midlands dh is from. It’s a complete hole of a place, but the only place we could afford to buy.

We bought our house in 2021 for £170k. We were so desperate to move last year, the area is awful, we are sandwiched between two notorious council estates, awful schools.

We had our house valued for 285k, granted, we spent 20k on it as it needed a lot of updating (other houses were on/sold for same). larger 5 bed houses are on for half a million. To live in a place full of crime and drug dealers, I don’t know who is buying them. It’s fucking madness. If we were to have moved here now, we wouldn’t have even been able to afford to rent here let alone buy.

20 years ago, this house sold for 65k.

My prediction is house price rises

its a supply and demand issue

It's your catch phrase LM!

I do agree with you as well. I think we will see rises, but I don't think they will be as significant as in the inflation on everything else. I think the correct terminology is nominal rises rather than real term rises?

Average price rises this year across the country do not seem to fit my area at all. It is an area that was super hot in 2020 so I think an inevitable lull of new properties on the market once turnover had happened. This year, especially since the budget, I see for sale signs up but not coming down. I'm in a desirable rural location. The big city 40 mins away has had huge estates built on the outskirts. We're trying to sell a coach house in the city which should be snapped up by first time buyers - nada.

According to the 18-year cycle guy that has an excellent track record, that's next year.

It's always next year according to someone

Well that's a shocker! 😂

House prices are massively increasing where I am. Things are going for silly money - it is definitely a supply and demand issue. Lots of people moving into rented waiting for things to come onto the market.