Residential property prices have continued to increase across the UK, the latest figures have revealed.
According to provisional estimates from the Office for National Statistics, average house prices rose by 4.9% in the 12 months to January taking the average price of a home in the UK to £269,000.
An increase on December’s annual growth of 4.6%, it was also the fastest jump since January 2023.
The price rises may have been impacted by a rush among buyers to complete transactions ahead of changes to stamp duty, due to happen on 1 April.
Iain McKenzie, CEO of The Guild of Property Professionals, commented: “The early months of 2025 have been characterised by a surge in activity as buyers and sellers alike looked to finalise transactions ahead of the stamp duty changes. This has driven a notable uptick in market momentum, with buyer demand, sales agreed, and new listings all showing positive year-on-year growth.
“While we may see a period of adjustment as the market absorbs the tax increase, improving mortgage rates and continued earnings growth are providing a solid foundation for sustained price stability. The outlook remains cautiously optimistic, particularly with the potential for further government support in the Spring Budget.”
Average UK monthly private rents, meanwhile, surged 8.1% in the 12 months to February, although that was a slowdown compared to January’s 8.7% hike.
Richard Donnell, executive director at Zoopla, commented: “Rental inflation has slowed as affordability pressures start to bite on renters, especially in London and some of the bigger UK cities, whilst stronger demand from first time buyers to buy homes has eased the demand for rented homes. Rents are still rising faster than earnings and we expect rental inflation to slow further over 2025.
“House prices are rising on the back of increased activity over 2024 with 10 per cent more sales and lower mortgage rates boosting demand, along with a rush to beat the stamp duty holiday. Our latest Zoopla data shows a significant increase in the supply of homes coming onto the market, rising at a faster pace than sales. Together with weaker first-time buyer demand and higher buying costs for most purchases, after April we will see price growth slowing over 2025.”
Across the UK, rents jumped 8.3% in England, to £1,381. In Wales and Scotland, they rose by 8.5% to £785 and by 5.8% to £998 respectively.
Northern Ireland reported an 8.1% rise in the 12 months to December to £832.
Tom Bill, head of UK residential research at Knight Frank, said: “The Renters Rights Bill creates uncertainty for landlords which may put upwards pressure on rents at a time when they are starting to come down from the highs of recent years. A piece of legislation intended to make life easier for tenants may inadvertently have the opposite effect if the supply of rental properties tightens.”
Read the orginal article: https://propertyindustryeye.com/house-prices-rents-rise-across-the-uk-industry-reaction/
