The UK property market ended 2024 on a strong note, with house prices recording a 3% annual increase, according to the latest Property Market Index Review from London-based lettings and estate agent Benham and Reeves. The report, which combines data from the UK’s four major house price indices, also showed that London property prices rose by 0.9% year-on-year despite a small quarterly dip.
Consistent quarterly growth boosts market confidence
Benham and Reeves’ Property Market Index Review reflects a comprehensive view of the UK housing market by blending data from Halifax and Nationwide (which track mortgage-approved prices), the Rightmove House Price Index (reflecting seller expectations), and the UK House Price Index (based on completed sales).
According to the index, the average UK house price reached £302,464 in Q4 2024 — a modest 0.1% increase from Q3 but marking the fourth consecutive quarter of positive growth. On an annual basis, house prices climbed by 3% compared to Q4 2023, highlighting consistent upward momentum.
London’s property market showed more mixed results. The average house price in the capital stood at £581,641 in Q4 2024 — down 1.1% from the previous quarter. However, on a year-over-year basis, London prices still managed a 0.9% increase, indicating resilience in the face of challenging economic conditions.
Market defies gloomy predictions
Marc von Grundherr, Director of Benham and Reeves, remarked on the market’s resilience:
“Following a prolonged period of higher interest rates and economic uncertainty, many were quick to call the demise of the UK property market at the start of last year. This simply hasn’t been the case and, in fact, we’ve seen a full house of positive quarterly growth, with property values also gaining ground on an annual basis.”
Von Grundherr noted that the market’s strength has continued into early 2025, supported by a further interest rate cut. He also highlighted the role of the upcoming stamp duty deadline on 1st April in driving increased activity in the first quarter of 2025.
“Whilst we expect that the impending stamp duty deadline will help to quicken the pace of house price growth over the first three months of this year, the general consensus is that this growing momentum will continue to build beyond 1st April and we look set for another year of positive growth.”
Positive outlook for landlords and buy-to-let investors
The rental market has also shown encouraging signs for landlords. According to von Grundherr, rental values have been climbing consistently, offering strong yields for buy-to-let investors. He added:
“We’re continuing to see sustained growth across the rental market, with rental values climbing consistently. This has helped to boost the yields on offer to the nation’s buy-to-let investors and so it remains a very worthwhile endeavour, despite the uncertainty posed by the incoming Renters’ Rights Bill.”
The Renters’ Rights Bill, which aims to strengthen tenant protections and reform rental agreements, has raised concerns among landlords. However, rising rental values and growing demand for rental properties have ensured that buy-to-let investments remain profitable.
Steady momentum
The sustained recovery in house prices, alongside rising rental yields, suggests that the UK property market is on solid footing heading further into 2025. While economic uncertainties remain, including potential further changes to interest rates and the impact of new legislation, the outlook for both homeowners and landlords appears increasingly positive.
With a full year of quarterly price increases under its belt, the UK housing market seems well-positioned to build on this momentum in the months ahead. The combination of stable price growth and strong rental yields makes property investment an attractive proposition — even in a shifting economic climate.
