Where did the biggest increases in property prices occur last year? In the UK, house prices increased 4–6%

A 46 percent increase in house prices in 2024 resulted in an average price of £268,000

Which areas saw the biggest increases in real estate prices, and will this year see more increases?

Official figures show that average UK home prices increased by 4 points 6 percent last year.

Compared to the growth rate of 3 percent in the 12 months ending in November 2024, this represents an increase. These days, the average house costs £268,000.

In Scotland, home prices increased by 6 to 9%, while in Northern Ireland, the growth was the strongest at 9%. Wales had the slowest growth in house prices, at 3%.

The Office for National Statistics measures the UK House Price Index, which is behind other indices like Halifax and Nationwide, which have made their January 2025 data available.

According to Halifax, home prices increased by 0.7 percent last month, reaching a record high of 299,138 for the average price. House prices, on the other hand, increased by just 0.1 percent in January, according to Nationwide.

But these indices only show the mortgages held by the lenders, while the ONS data records all residential property sales, including those made with cash and those financed.

The 46% increase in home prices last year "adds to a growing list of reasons for optimism about the UK property sector," according to Ross Turrell, commercial director at the lender CHL Mortgages.

There is a genuine sense that market activity is picking up speed, he continued, with annual growth continuing to hold steady and the recent rate cut by the Bank of England boosting demand. Consequently, investors and consumers are displaying a renewed sense of confidence, and market momentum is increasing.

What changes have you seen in UK home prices?

The average price of a home in England rose by 4.3 percent last year, reaching 291,000.

The average cost of a home in Wales is 208,000, after a 3% increase in home prices. Scotland saw robust annual growth of 60.9 percent, and the average price of a home today is 189,000.

In Northern Ireland, the average price of a home increased by 9%, to 183,000.

Also, the ONS breaks down its data by English region. In the twelve months leading up to December 2024, the North East had the highest rate of inflation in home prices, at 6.7 percent. During the 12 months leading up to November 2024, this increased from 6 to 4 percent.

London had the lowest annual inflation rate for home prices, at 0% in the 12 months ending in December 2024. In the 12 months leading up to November 2024, this was down from 0 to 5 percent.

In 2025, will home prices keep rising?

House prices are expected to rise in the first quarter of 2025 as a result of the final few months of the temporary increase in stamp duty thresholds.

Taxes have only been applied to homes valued over £250,000 since October 2022, or £425,000 for first-time purchasers. However, on April 1st of this year, these thresholds125,000 for regular buyers and 300,000 for first-time buyerswill return to their initial values.

Due to the fact that stamp duty can cost thousands of pounds, many buyers are rushing to finish their purchases before April 1st.

Head of sales Amy Reynolds of London-based Antony Roberts says she received "more applicants in January than in the last quarter of last year, some of whom have found themselves in a position to buy because a first-time buyer has completed their chain."

Reynolds notes that the UK economy and mortgage rates, however, have her worried about the second quarter of this year after the stamp duty thresholds are lowered.

The UK economy is in a precarious position, so we don't expect the bank rate to drop any further in the first half of the year. If anything, we might see fixed mortgage rates gradually rise, which would be detrimental to activity.

The ONS today announced the rate of inflation for the 12 months ending in January 2025 in addition to releasing its most recent house price index. It stated that the 3 percent increase in inflation was greater than the 2 to 8 percent predicted by analysts.

Mortgage rates may rise as a result of the Bank of England delaying its next interest rate cut.

Jason Tebb, president of the real estate portal OnTheMarket, said: "The Bank of England is closely monitoring inflationary pressures in the upcoming months, so the next rate cut may be postponed a bit given the unexpected 3% increase in inflation.

However, he claims that because of the recent reductions in mortgage pricing by several lenders due to lower swap rates, there are now some deals available that are less than 4 percent. He also says that other lenders might follow suit, which would lower average mortgage rates.

As a result, home prices may rise this year and attract more buyers.

A week ago, the average two-year fixed residential mortgage rate was 5.48 percent; today, it is 5.41 percent. This information comes from Moneyfacts. The five-year fix average has decreased from 5point 29 percent to 5point 23 percent.