UK house price growth set to return across all regions in 2025

Zoopla has forecasted a positive growth in house prices across all regions and counties of the UK in 2025, with the north expected to outpace the south.

The property platform anticipates sales growth at five per cent and house price growth at 2.5 per cent across the UK, with Northern Ireland and the North West seeing the fastest price increases, as reported by City AM.

Despite "despite Budget headwinds", Zoopla predicts this growth, although it acknowledges that "affordability pressures" continue to weigh on house prices in the South East, where it forecasts price growth of less than one per cent.

"Postponed home moves, an ageing population, rising running costs and changing working patterns will continue to impact moving decisions, in addition to the desire to seek a better home or location. " Zoopla stated.

The platform also noted that "First-time buyers will remain the largest buyer group, supporting housing chains and helping existing homeowners to move."

This is despite the end of first-time buyer’s relief on stamp duty, which will result in an additional 20 per cent of first-time buyers being liable to pay.

Zoopla highlighted that higher-than-expected income growth has been aiding affordability. With wage growth recently surpassing inflation, household disposable incomes have risen by 15 per cent between the second quarter of 2022 and the second quarter of 2024, as reported by the Office for Budget Responsibility (OBR).

This has made houses more affordable without the need for a drop in house prices, according to Zoopla.

After a period of prohibitively high mortgage rates, affordability has seen an improvement, making home ownership more attainable for many.

"Higher income growth and lower mortgage rates have helped reset housing affordability faster than many expected over 2024," observed Richard Donnell, executive director at Zoopla.

"This has supported an increase in the number of sales and house prices over the year which we expect to continue over 2025," he added.

Matt Thompson, head of sales at Chestertons, commented on the broader market sentiment: "Other buyer demographics, including families, couples, professionals and downsizers considered 2024 a challenging year to buy a property amid political and economic uncertainty but now feel more motivated to resume their search in the new year."