Annual UK house price growth accelerated in November – ONS

Annual house price growth accelerated to reach 3.3% in November, according to official figures.

The annual growth rate ticked up from 3.0% in October, Office for National Statistics (ONS) data showed.

This took the average UK property value in November to £290,000.

Average house prices increased in England to £306,000 (3.0% annual growth), in Wales to £219,000 (3.0%) and in Scotland to £195,000 (4.7%), in the 12 months to November 2024.

The average house price for Northern Ireland was £191,000 in the third quarter of 2024, up by 6.2% from the same period a year earlier.

The data was released as ONS figures also showed a surprise slowing in inflation.

The rate of Consumer Prices Index (CPI) inflation eased to 2.5% in December, from 2.6% in November, following expectations the rate would be unchanged.

The cost of Government borrowing eased on Wednesday morning as traders reacted to the latest economic data and hopes that mortgage rates will ease were also boosted.

Iain McKenzie, chief executive of the Guild of Property Professionals, said: “With mortgage rates still elevated, all eyes will be on the Bank of England, with many hoping for a rate cut at the next meeting in February.

“This should spur sentiment in the market and will hopefully have a knock-on effect on mortgage rates. Many are expecting a few rate cuts throughout 2025, but the frequency will depend on inflation playing its part.”

David Hollingworth, associate director at L&C Mortgages, said: “The surprise dip in inflation is some positive news for borrowers who will have been unsettled by the recent unrest in the gilt markets and what it may mean for mortgage rates.

“Although there may still be increases to come in the months ahead, the fall in inflation will firm up the hopes that the (Bank of England) Monetary Policy Committee will cut the base rate in February.”

Mr Hollingworth said the market has been less convinced that the Bank of England will cut rates as far and as quickly as had previously been expected, adding: “That has seen fixed rates edging higher before the end of the year, something that’s continued into the new year.

“This will have added an unwelcome dollop of uncertainty for borrowers that had been hoping for continued improvement in mortgage rates.

“The base rate is still expected to fall but the question is whether that drop will now be shallower and more gradual.

“Today’s figures will help to maintain some stability in mortgage rates but those borrowers coming to the end of their current deal are still likely to want to secure a new rate a few months ahead of time. That will allow them to dodge any further increases if fixed rates continue to rise but still gives them room to review if things take a turn for the better.”

Jason Tebb, president of OnTheMarket, said: “Two interest rate cuts in the second half of last year have had a positive knock-on effect on confidence, which the market relies so heavily on. With inflation dipping slightly to 2.5%, it is heading back in the right direction albeit slowly, but if this trend continues it will ease pressure on the Bank of England to delay further rate reductions.

“Affordability remains a challenge with a number of lenders raising rates in recent days on the back of higher swap rates but there has not been significant repricing. Sellers would be wise to take advice from their local agent and price sensibly if they want to successfully transact this year.”

Jonathan Handford, managing director at Fine & Country said: “There is still cautious optimism among experts for what the year has in store for the industry, with many hoping for another rate cut in the coming months.”

Nathan Emerson, chief executive at property professionals’ body Propertymark, said: “With keenness from many across England and Northern Ireland to complete before stamp duty increases take effect in April, it is imperative there is a strong sense of confidence for people to approach the market.

“Across the last quarter, our members have witnessed a positive uplift in the number of prospective buyers registering.”

Simon Gerrard, managing director of Martyn Gerrard Estate Agents, said: “Overall, it was a busy end to 2024, and this pace has continued into the new year, with a strong pipeline of deals already agreed.”

Verona Frankish, chief executive of Yopa, said: “The result of this heightened buyer activity is likely to be further house price growth over the coming months.”

The ONS figures also showed that average UK private rents increased by 9.0% in the 12 months to December 2024, slowing from 9.1% in the 12 months to November 2024.

The average private rent in Britain was £1,327 per month in December 2024, which was £110 higher than a year earlier.

Sarah Coles, head of personal finance, Hargreaves Lansdown said: “The rate of rises has eased very slightly, but that will come as no comfort to anyone facing a 9% overnight hike in the cost of keeping a roof over their head.”

Gareth Atkins, managing director of lettings at Foxtons, said: “Looking at the rental landscape in the year ahead, I expect to see traditional seasonality in the market, similar to 2024.

“Whilst we’re projecting modest rent growth of 3-5%, the real story will lie in the resilience of supply levels.”