Zoopla reports that lower mortgage rates have contributed to a resurgence in house price growth across the UK, with a forecasted 2.5% increase in prices next year. Buyer demand has risen by 25% compared to last year.
In Zoopla’s October house price index, the average UK house price was £267,200, a slight decrease from the previous month but still 1% higher than in October 2023.
The housing market has seen growth in 2024, with more sales and higher prices compared to 2023, outperforming expectations from a year ago. This growth has been driven by faster increases in household incomes and lower mortgage rates, according to the report.
The number of agreed sales is increasing as buyers rush to finalize deals before higher stamp duty rates return in April 2025. Sales agreed are 19% higher than last year, and buyer demand has increased by 25%. Currently, half of existing owner-movers pay stamp duty, but this is expected to rise to 83% by next April.
This increase in market activity has led to house price inflation across all UK regions, with the largest year-on-year increases seen in Northern Ireland (6.3%) and the North West (2.9%).
Looking ahead, Zoopla predicts mortgage rates will remain steady at current levels, with a 75% loan-to-value, five-year fixed mortgage likely at 4.25%. The property platform expects house prices to increase by 2.5% in 2025, with housing sales rising by 5% to 1.15 million, driven by rising incomes and changes in how lenders assess affordability.
