Listen to the House Price Index headlines with Richard Donnell
Key figures
The average house price in the UK is £267,500 as of September 2024 (published in October 2024).
Property prices are now at +1% inflation compared to a year ago. However, the average UK house price is set to rise by 2% by the end of the year.
Average house price in July 2024 | Average house price in August 2024 | Average house price in September 2024 | Year-on-year change (£) | Year-on-year change (%) | |
All property | £267,100 | £267,400 | £267,500 | £2,770 | 1% |
Detached houses | £449,400 | £449,800 | £449,800 | £1,020 | 0.2% |
Flats | £191,500 | £191,900 | £191,900 | £660 | 0.3% |
Semi-detached houses | £273,100 | £273,400 | £274,100 | £4,280 | 1.6% |
Terraced houses | £236,200 | £236,200 | £237,000 | £4,810 | 2.1% |
The graph below shows how the UK’s average house price has changed in the last 10 years.
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2024: A bumper year for sales
2024 is turning into a bumper year for housing sales, as intense competition amongst lenders has seen average mortgage rates reach their lowest for two years. Together with rising incomes, this is supporting the highest level of new sales agreed since 2020’s boom in the wake of pandemic restrictions being lifted.
House prices are rising more slowly, up by just 1% over the last 12 months to September 2024, compared to -0.9% a year ago. Price inflation is being held back by a large choice of homes for sale, while buying power is being kept in check by affordability pressures.
House prices are rising at an above-average rate in areas with more affordable house prices, e.g. the North East (2.0%), Yorkshire & Humberside (2.0%), the North West (2.3%), Scotland (2.4%) and Northern Ireland (5.6%). House prices are posting small falls in the Eastern (-0.3%) and South East (-0.1%) regions. UK house prices remain on track to be 2% higher over 2024.
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Sales pipeline at its largest for 4 years & up 30% on last year
The sustained growth in new sales over the year has led to the largest sales pipeline for four years. We estimate that there are currently 306,000 homes with a sale agreed, which are working their way through the buying process towards completion. This works out at 62,000 (or 26%) more homes than a year ago.
The total sales value of homes in the pipeline is £113bn. This is 30% higher than this time last year, when a spike in mortgage rates hit buyer demand and reduced the number of sales agreed over the second half of 2023.
The momentum in new sales looks set to continue into December. And many recent sales will turn into completed sales over the first half of 2025.
First-time buyers: the largest buyer group in 2024
FTBs are on track to be the biggest buyer cohort in 2024, accounting for 36% of all sales. This is followed by existing homeowners buying with a mortgage (31%).
Cash buyers are on track to account for 27% of sales. These are a mix of homeowners who have paid off mortgages and some mortgage-free investors. Landlords buying homes with buy-to-let mortgages are set to account for 7% of purchases, with their volumes hit by higher mortgage rates.
The rapid growth in rents and the decline in mortgage rates have shifted the renting vs buying dynamics and supported more FTB purchases. The average mortgage repayments for a typical UK FTB home are 17% cheaper than renting, compared to a difference of just 2% a year ago, when mortgage rates were higher.
First-time buyers benefit from landlord sales
First-time buyer numbers are supported by landlords selling homes, as in these instances the average asking price tends to be lower. Out of homes listed for sale, 12% were previously rented, with an above-average concentration of landlord sales taking place in London.
The average asking price of a formerly rented home is £307,000, which is 16% lower than the average UK asking price of £365,000.
This is a positive development for the sales market and is the likely explanation of improved market performance in London. However, it’s less favourable for the rental market, where there is a chronic undersupply of homes. Landlords selling up creates scarcity which pushes rents higher, hitting lower-income renters the hardest.
Government Budget 2024: stamp duty tax
FTBs currently get relief from stamp duty land tax in England and Northern Ireland, paying no stamp duty on properties that cost up to £425,000 and only partial stamp duty on homes priced up to £625,000. Currently, 80% of FTBs pay no stamp duty and 14% pay partially.
These thresholds are set to return to previous, lower levels from April 2025. Without action in the upcoming Budget, 20% of FTBs would be set to pay stamp duty once again.
The impact of stamp duty changes will be the greatest in southern England, where an average FTB in London would face a stamp duty bill of £5,600 or £1,390 in the South East, compared to £0 today.
In parts of London with home values over £600,000, FTBs could pay an additional £15,000 in stamp duty. Faced with higher costs, FTBs will want to pay less for homes, which will keep future price rises in check.
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Housing market outlook
The housing market is adjusting to the step change in mortgage rates over the last two years. It is positive to see more sales activity supported by rising incomes and mortgage rates in the lower 4% range. Additionally, this reflects growing confidence amongst buyers and sellers.
Our assumption remains that mortgage rates will remain close to current levels (4%-4.5%) over 2025. This means wage growth will have to do the hard work supporting affordability and buying power with house price growth likely to remain modest. The market remains on track for a modest 2% price increase in 2024, with sales of 1.1m.
The housing market is an extension of the economy, so we hope for a government budget that delivers economic growth and rising incomes alongside much needed investment to support the development of more homes.
House Price Index - country, region and city summary
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About our House Price Index
The Zoopla House Price Index (HPI) is a repeat sales-based price index, using sold prices, mortgage valuations and data for recently agreed sales. The index uses more input data than any other and is designed to accurately track the change in pricing for UK housing. It’s a revisionary index and non-seasonally adjusted.
The HPI for October 2024 uses the most recent full data available up to August 2024. We revise previous data where needed to ensure the most accurate representation of the market at any given time.