A new analysis by a prominent buying agent suggests the housing market is strong but showing a growing north-south divide – with London providing particularly good value for money right now.
British house prices increased by 4.6% in 2024 after a 3.9% increase in the 12 months to November, the Office for National Statistics says.
In England the December data shows, on average, house prices have not changed over the previous month. The annual price rise of 4.3% takes the average property value to £291,000.
The regional data for England indicates that the East of England experienced the most significant monthly increase with a movement of 0.6%; Yorkshire and the Humber saw the greatest monthly price fall, with a drop of -0.8%; while the North East experienced the greatest annual price rise, up by 6.7%.
However, London says now price change at all. Indeed, on average house prices in the capital decreased by 0.3% since November 2024 meaning the average price of a property is £549,000.
Jonathan Hopper, chief executive of Garrington Property Finders, says: “Not since the heady post-lockdown ‘race for space’ has the divergence between London prices and the rest of the UK been so stark. Average property prices in the capital ended 2024 exactly where they began the year. Zero growth over the year as a whole, and we even saw London prices fall in November and December.
“This is partly a whiplash effect from the tax rises announced in the Chancellor’s October Budget, which hit sentiment hard at the top end of the market. Buyers in the capital have since become highly price-sensitive, and willing to negotiate hard on price or simply look elsewhere.
“At the other end of the scale, the market dynamics in Scotland and Northern Ireland are seemingly detached from economic gravity. Two factors underpin their rapid price growth – soaring rent increases have nudged many tenants into buying their first home, and the relatively strong value offered in both nations compared to other parts of the UK has lured price-conscious buyers from elsewhere.
“That second factor also lies behind the brisk pace of price rises across Northern England, and continues to widen the North-South divide.
“The property market is broadly in good health. The supply of homes for sale is strong and the cost of borrowing has edged down in February – with lenders offering mortgage interest rates below 4% for the first time in months. The number of homes for sale is so abundant in some areas – even in highly sought-after, prime postcodes – that buyers find themselves firmly in the driving seat and able to drive a hard bargain on price. This is likely to keep future price rises modest in much of southern England, and anyone planning to put their home on the market there in the coming months will need to price it competitively to attract buyers.”
Wales shows, on average, house prices fell by 0.5% since November. An annual price increase of 3% takes the average property value to £208,000.
Separate statistics show that in December 2024, on a seasonally adjusted basis, the estimated number of transactions of residential properties with a value of £40,000 or greater was 96,000. This is 18.7% higher than in December 2023. Between November 2024 and December 2024, UK transactions increased by 2.9% on a seasonally adjusted basis.
The North-South divide and the plight of London’s market are all echoed in the latest data from the respected asking price index produced by the Home website.
It says sellers across Greater London and the South of England are resorting to competitive pricing due to high stock levels.
Contrary to seasonal expectations, the mix-adjusted national average asking price has dipped early this year, driven by significantly lower pricing in the capital as well as the South East and South West of England.
In stark contrast, vendors in the North and Scotland are much more confident in their pricing. Among these top performing regions, Yorkshire indicated the largest monthly rise of 0.8%, seemingly a world apart from the pain felt in the South.
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