House prices rise at their fastest in two years
New data shows that in January, house prices rose rapidly in Northern England and Yorkshire.
Average UK house prices increased by 4.9 per cent to £269,000 in the 12 months to January 2025, according to the Office for National Statistics (ONS).
This annual growth rate is up from 4.6 per cent in the 12 months to December 2024.
“The modest increase in house prices confirms what we have seen in our offices – a steady rise kept in check by improving stock levels,” Jeremy Leaf, north London estate agent and a former RICS residential chairman, said.
“However, these figures reflect activity from a few months ago at least when many were trying to take advantage of the fast-disappearing stamp duty concession which skewed performance.”
House price growth was fastest in the North, at 9.1 per cent in the North East and 6.8 per cent in the North West.
Growth was slowest in London and the South West, at 2.3 per cent and 2.7 per cent respectively.
Jason Tebb, President of OnTheMarket, said: “Two interest rate cuts in the latter half of last year and one so far this year have had a positive knock-on effect on confidence, which the housing market relies so heavily on.
“Affordability remains a challenge but with a number of lenders reducing their mortgage pricing over the past few weeks, this may continue to ease if other lenders follow suit.”
Soaring rents boost house buying
Average UK monthly private rents increased by 8.1 per cent, to £1,326, in the 12 months to February 2025, the ONS said.
Private rent annual inflation was – as usual – highest for in-demand London, at 9.9 per cent.
As interest rates ease and mortgage affordability improves, many buyers have been encouraged to take the leap from expensive rented properties to putting their money in housing.
“At present soaring rent increases continue to nudge many tenants into buying their first home,” Jonathan Hopper, CEO of Garrington Property Finders said.
Director at Thomas Legal Chris Barry said that an exodus of landlords from the rental sector may push rents up even further: “Landlords are withdrawing from the market due to increased costs, which will push rents even higher in the months ahead. The full impact of the landlord exodus has yet to hit home.”
Sean Horton, Managing Director at Respect Mortgages added: “Landlords are feeling the squeeze from all angles. Higher mortgage rates have hammered their margins, while EPC upgrade costs add another layer of financial pain.
“With interest rates still elevated and new energy efficiency rules looming, many have little choice but to bump up rents to stay afloat.”