The UK housing market experienced a resurgence in 2024, with property values increasing for half of the nation’s 30 million homes. This rebound followed a period of decline in 2023, largely attributed to escalating mortgage costs driven by the Bank of England’s base rate hikes. While the market recovery was evident across the country, a distinct North-South divide characterized the pattern of growth, with affordability playing a key role.
Certain areas emerged as property hotspots, experiencing substantial monthly and annual price surges. Berkhamsted in Hertfordshire led the charge, witnessing an average monthly increase of £2,041, translating to a staggering £24,500 annually. Other noteworthy locations included Waltham Forest in London with a £725 monthly rise, Carluke in Scotland with £741, and Glossop in the East Midlands with £583. Peterlee, Blackburn, and Thame also saw significant annual growth of £6,100, £8,100, and £5,600 respectively, underscoring the localized nature of the market boom.
The overall picture reveals that 15 million properties saw their values grow by at least 1%, a significant increase from the 10.6 million homes that experienced similar growth in 2023. The average rise for these properties was approximately £7,600, with nearly seven million homes enjoying an even more substantial increase of £10,000 or more. However, the recovery was not universal, as 9.2 million homes experienced a price decline of 1% or more, although this figure represents a decrease from the 12 million homes that experienced declines in 2023. An additional six million homes remained relatively static, experiencing negligible price fluctuations of less than 1%.
This uneven distribution of growth highlights the influence of affordability on market dynamics. Regions where housing costs are relatively low compared to average incomes, particularly in northern England and Scotland, experienced more significant price increases. Conversely, the southern regions of England, where affordability remains a challenge due to higher property prices, saw more constrained growth. This reflects the lingering impact of higher borrowing costs, which had a more pronounced effect on markets where affordability is already stretched.
A clear North-South divide was evident in the regional analysis of price changes. While only 36% of homes in Southern England registered a value increase of over 1%, this figure rose dramatically to 60% in Northern England and Scotland. Average price increases in the north of England reached £4,300, with one in five homeowners witnessing growth of £10,000 or more. The North West also saw strong performance, with 63% of homes experiencing a 1% or greater increase in value, averaging £4,400. Scotland and Yorkshire and the Humber mirrored this positive trend, with 60% of homes gaining value and average increases reaching as high as £19,300.
Looking ahead, forecasts suggest a continued, albeit more moderate, growth trend for 2025, with an average predicted increase of 2.5%. However, the North-South divide is expected to persist, influenced by the interplay of affordability and historical price growth. Southern England, particularly London, where prices have escalated significantly since 2010, may experience slower growth compared to other regions. This divergence underscores the importance of regional considerations when assessing market trends and making investment decisions. It’s crucial to acknowledge the significant disparities in affordability and price growth across the UK, factors that continue to shape the housing landscape.
For prospective homeowners or those looking to remortgage, navigating the complexities of the mortgage market requires careful consideration. Securing the best deal often involves optimizing factors such as deposit size, loan-to-value ratio (LTV), credit score, and income. Regularly reviewing mortgage options, especially when nearing the end of a fixed-rate deal, is crucial to capitalize on potentially lower interest rates. Utilizing mortgage comparison tools and seeking advice from mortgage brokers can provide valuable insights and access to a wider range of deals. Understanding the nuances of mortgage fees, early exit penalties, and the long-term cost implications of adding fees to the loan principal is essential for making informed decisions. Thoroughly assessing affordability, preparing necessary documentation, and understanding lender eligibility criteria are vital steps in the mortgage application process.
