House Price Index: The Latest House Price Data

The UK House Price Index (HPI) is a National Statistic that is released monthly (except for Northern Ireland, which is released quarterly) to show how property prices fluctuate over time in England, Scotland, Wales, and Northern Ireland, based on various factors such as inflation and interest rates. Understanding the HPI can provide valuable insights into house prices to help homebuyers, sellers, and investors have a clearer understanding. 

This blog will take a deep dive into the key aspects of the HPI, highlighting the latest statistics and figures throughout 2024 to show how this has varied. We’ll also look into the impacts these shifts can have on first-time buyers, the challenges involved in selling a property, and the future of house prices. We’ll also look into the cities that have seen the biggest shifts in house prices, and provide ways to make the selling process smoother.

Key Takeaways

• • Key Figures
  • 2024 House Price Data
  • First Time Buyer Mortgages – House Price Data
  • Stamp Duty and the Government Budget Plan
  • Housing Market Outlook 2025
  • House Price Index by Region
  • How Can SmoothSale Help?

Key Figures

The most recent House Price Index was released in November 2024, showcasing house price statistics for September 2024. Some of the headline statistics from this report included: 

• The average price of a property in the UK was £292,000
• Annual property prices in the UK saw a 2.9% change
• The monthly price change for a UK property was -0.3% 
• The house price inflation was the highest in the North East of all English regions, where prices increased by 6.5% annually 

The HPI also covered the volume of sales, buyer status, and funding status.

2024 House Price Data

Buying and selling homes in 2024 has been challenging, with both showing noticeable slumps. This is due to a range of factors, including:

High Interest Rates

To try and control inflation in the UK, the Bank of England has kept interest rates raised. This has resulted in high mortgage rates, as mortgage lenders charge more for borrowing,  making it harder for potential buyers to afford monthly mortgage payments. This has also affected the amount potential buyers could borrow, and many may not qualify for an amount they once did. This of course affects existing homeowners, but the high interest rates have had a significant impact on first-time buyers, as they tend to start with smaller deposits, making them more sensitive to mortgage rate changes.

The high interest rates seen in 2024 have certainly created a challenging environment for those buying homes, due to reduced borrowing power, affordability, and overall confidence. Sellers have also been affected, due to the decreased buyer demand, lower offers, and an overall slower market.

Cost of living

The cost of living crisis has been prevalent in the UK for a few years now, and this certainly hasn’t changed in 2024, which has had an impact on both buyers and sellers. The high inflation and increase in the cost of everyday goods and services have impacted household budgets. 

This has affected a range of factors when it comes to buying and selling a home, such as first-time buyers’ ability to save for a deposit, reduced mortgage affordability due to higher outgoings, and overall reluctance to enter the housing market. For sellers, the cost of living has resulted in fewer potential buyers, lower valuations and offers to reflect what buyers can realistically afford, and increased costs for sellers including higher estate agent and conveyancing fees. 

Falling House Prices

Due to fewer people being able to afford homes, house prices started to drop across parts of the UK at the start of 2024, with some regions seeing a 3.9% annual fall in house prices. Although this can benefit buyers who are looking for a deal, sellers are more hesitant to list homes at lower prices. Luckily for sellers, according to the recent HPI, house prices are back on the up!

Government Policy Uncertainty

Many prospective buyers and sellers have expectations around housing policies, especially ones relating to property taxes and support for first-time buyers, which has made them unsure of when and how to enter the market. Many expected the recent 2024 Autumn Budget to provide a more significant update on the housing market, but the update mostly touched on tax and policy changes that may influence the movement of people in and out of the UK, rather than an in-depth housing market update, adding to the uncertainty.

Selling A House In This Market

Selling a home in the UK in 2024 has been just as challenging as buying. The factors above have massively decreased buyer demand, and many buyers have avoided entering the market at all, in hopes these factors will improve. In turn, this has left sellers with fewer offers and has also impacted the length of time it takes to sell. Attracting qualified buyers has been a big issue for sellers, and has resulted in pressure to lower asking prices, which often can cut into profits and even lead to financial losses, especially in high-cost areas. 

Selling in 2024 has required sellers to be more flexible and patient — many potential sellers have held off-putting their homes on the market in hopes buyer confidence, the financial climate and the overall housing market will improve. 

What Is The Current Market Value Of A Home?

According to the recent HPI (September 2024), the current market value of a home in the UK is £292,000 – a 2.9% annual increase, suggesting that house prices are back on the rise! 

Of course, the market value of a home differs according to a range of factors, such as the location, size of the home, transport links, age, and much more. Some ways people can try to find out the market value of their  home include:

Online Valuation Tools

There are a range of online valuation tools available that you can use to get an estimated valuation of your property quickly and conveniently. However, bear in mind that these are rough valuations based on a range of factors, including some of the below. The valuation provided may not be exactly what you will get when selling as they won’t take into account individual property conditions, such as unique features.

Look at recent sales in the area

Many of us are guilty of looking at homes in our location online simply to be nosy, but looking at recent areas in the area can be a great way to gain an estimate of what your home might be worth. There is a range of sites you can look at this on, including most property-selling sites, and the information is also available on the HM Land Registry. Looking at any homes close by that have similar features to yours, such as the number of bedrooms or size of the garden, can give a good indication of value, but like above, it’s not a definite value. 

Speak to estate agents

Many estate agents will offer free valuations as part of their service. Going to an estate agent can provide a more accurate and personalised valuation, and they can also provide local market insights, taking into account comparable properties in your area, buyer preferences and trends. They will also consider any unique features or upgrades that could add value to your property, such as smart home features, energy efficiency improvements, or additional living spaces like a home office.

First Time Buyer Mortgages – House Price Data

The above combinations of high interest rates, elevated property prices and tighter lending standards have massively affected first-time home buyers in 2024. As discussed above, higher interest rates have made it incredibly difficult for first-time buyers to save for a deposit, and tighter lending standards mean the amount of deposit needed has increased. 

Other influences that have affected first-time buyers include:

Increased rental costs

Renting has also become much more difficult in 2024, due to factors such as limited housing supply, increased demand due to people struggling to buy, and increased renting costs. Many first-time buyers will rent whilst trying to save a deposit to buy a home, so a rise in renting costs is making it even more difficult for those who are renting whilst saving for a deposit.

Lack of Government support and schemes

In previous years, there have been a range of Government schemes that were designed to support first-time buyers, such as the Help to Buy ISA, but many have been altered or phased out completely, leaving first-time buyers with fewer options for support. Due to the struggle many first-time buyers are facing, there is a rising demand for Government intervention. 

There has been a range of discussions about policies to improve affordability by implementing new ownership schemes or tax reliefs. However, these initiatives are not yet available and are still in development.

Increased competition with investors and homeowners

Across the UK, especially in high-demand areas such as London, many investors are buying properties to either resell or rent, which in turn is driving up prices and also reducing the availability of homes for first-time buyers. As well as investors, first-time buyers also faced extra competition from existing homeowners — due to interest rates rising and the cost of living crisis, many homeowners are looking to downsize or move into more affordable homes.

House Price Index Data on First-Time Buyers Costs

According to the latest HPI, the average price for properties purchased by first-time buyers was £245,208 — a 0.4% month-on-month increase in the average price for first-time buyers, and a 3.2% annual increase. 

This shows just how competitive the housing market is for first-time buyers, with the annual price growth surpassing that of properties for former-owner occupiers (2.4% annual increase). The data shows the financial pressure on first-time buyers as they are seeing prices increase more quickly, making it more difficult to enter the market.

Stamp Duty & the Government Budget Plans

The recent Government budget plans, shared on 25th October 2024, introduced several measures that will likely impact the HPI and therefore, the housing market. Some of the key announcements that could impact both buyers and sellers included:

Significant Changes To Stamp Duty Land Tax

The 2024 UK Autumn Budget introduced significant changes to Stamp Duty Land Tax (SDLT) that will impact homebuyers. 

A key change will be the increase in SDLT for additional properties, such as buy-to-let properties or second homes. The rates for these properties recently increased from 3% to 5% and will increase further in April 2025 — this could be as high as a 17% increase for properties above a certain threshold. The goal of this increase and desired impact is to free up more properties for first-time buyers and homeowners and ease the supply issues in the housing market. 

Another announcement was the extension of stamp duty relief for first-time buyers. This allows them to pay no stamp duty on properties valued up to £425,000 and is intended to help first-time buyers get on the property ladder despite the elevated mortgage rates and higher property prices. This relief aims to reduce upfront costs, therefore, making homeownership more achievable for those struggling with affordability. 

Some other Stamp Duty announcements included incentives for regional investment, meaning there would be some regional variation in stamp duty in designated “growth zones” where the government is investing in infrastructure and economic development, such as parts of the Midlands and the North of England. This would mean buyers within these areas could benefit from lower stamp duty rates. 

The Chancellor also implied that there would be a longer-term review of the stamp duty structure to address affordability sustainably. Although no immediate changes or updates were announced on this, there could be incentives offered in the future that could impact prospective buyers.

Housing Market Outlook 2025

Moving into 2025, we expect to see the housing market experience some modest shifts that will be shaped by factors such as inflation, government policy changes, and housing market demand. This is likely to have an impact on first-time buyers. 

Our experts suggest that the housing market in 2025 will benefit from post-election stability — the combination of this and the expected gradual income growth and base rate cuts is likely to massively increase buyer confidence, supporting modest house price growth and a relatively balanced market, benefitting both buyers and sellers. 

Interest rates are expected to lower if inflation continues to stabilise, which will massively benefit first-time buyers and lower interest rates are likely to improve mortgage affordability. Moderate price growth can also reduce competition, and rising incomes can help first-time buyers meet the necessary lending and deposit requirements.

Overall, the housing market in 2025 is likely to bring more opportunities for first-time buyers, and they should remain up to date with any evolving conditions, taking advantage of any policy changes that could align with their financial goals. Affordability improved and price growth remaining steady brings an ideal time for many to enter the market.

House Price Index by Region

The HPI also revealed the average house price by country and government office region, showing the monthly and annual change. 

According to the recent HPI, the areas that have seen the biggest annual increase include:

• The North East of England with a 6.5% annual increase
• Northern Ireland (Quarter 2–2024) has seen an annual increase of 6.2%
• Scotland has seen a 5.4% increase annually

The areas that saw a decrease or smaller increase in house prices annually were:

• London, which saw an annual decrease of 0.5%
• Wales saw a 0.4% annual increase, according to the latest data
• The South West of England saw a 1% annual increase

The below graphic shows the average house prices within the country and government office regions. 

How Can SmoothSale Help?

SmoothSale specialises in fast cash sales, offering homeowners and potential buyers a stress-free solution that can be tailored to their circumstances. This is a valuable alternative to the traditional property sale process and can bypass some of the complexities that come with the market, such as long chains, drawn-out negotiations and potential buyer pull-outs. 

This service is particularly beneficial for those who are looking to sell quickly at market value due to urgent situations such as needing to relocate quickly due to work or personal reasons or the need to avoid repossession. 

Selling for cash comes with a range of benefits for both buyers and sellers — the process can be quicker, more secure and less stressful. 

For sellers, cash sales can help avoid chains, cut costs as buyers are likely to buy a home ‘as is’ and money won’t need to be spent on upgrades or staging, and can also save on costs such as agent fees and home inspections. 

For buyers, cash sales can reduce competition as cash buyers are more likely to have offers accepted, cash buyers can also have a stronger negotiating power due to this and the speed of the sale, and they can also save on costs such as interest rates due to not needing a mortgage. 

If you’re looking to sell your home for cash at a quick pace, get in touch today and we can help!