UK property market starts 2025 in good health – Zoopla House Price Index December 2024

January 8, 2025

2024 was undoubtedly a good year for the UK property market. The worst of the economic challenges facing the UK passed, and instead, we began to see more certainty.

That meant the market not only stabilised but began growing again. At the end of last year, we predicted house prices and rents would keep growing, borrowing would become more affordable, construction rates would remain low and new legislation would have a limited effect – all good things for property investors.

Investing early in 2025 could be the key to success, and the latest data from Zoopla backs up that theory.

‍‍

Market activity is increasing

The property portal’s December 2024 UK House Price Index shows that by the end of the year, UK market activity was increasing. Both buyers and sellers have returned to the market in large numbers.

Year-on-year figures from December 2024 show:

21% increase in buyer demand
23% increase in sales agreed
18% increase in new homes on the market
10% growth in the overall stock of homes for sale

All of that was on top of a 30% annual increase in the number of homes in the sales pipeline. People are buying property, and that means increased competition in the market.

‍‍

House prices will increase faster in the North of England

Any investor looking at UK buy-to-let investment property will be pleased to know that Zoopla recorded overall house price growth of approximately 2% in 2024.

That follows two years of property values staying flat or even falling in some areas.

In 2025, Zoopla expects the average UK house price to increase by a further 2.5% - but investors should be aware of regional differences when looking at UK property for sale.

House price growth used to be centred on London and the South East 15 years ago. Since 2010, those regions have seen growth of 83% and 70% respectively.

However, looking ahead it is northern markets which offer the best conditions for investment and are likely to see higher growth. They offer:

The lower price of entry
Faster population growth
Lower construction rates
Higher demand for property

Cities such as Manchester (3.1%) and Liverpool (2.6%) will both grow faster in 2025 than the UK average because of these factors. Beyond that, growth will continue accelerating until at least 2029.

Regionally, that potential also makes the North West the UK’s best property investment location. Developments such as Vivere, W Residences, Central Liverpool and Hordan House are therefore priority investment opportunities.

You can learn more about where to invest in 2025 here.

‍‍

Buyers becoming more price-sensitive

Finally, the latest data from Zoopla shows that buyers are becoming more price-sensitive in 2025. The gap between the asking price and the agreed sales price has fallen to just 3.6% - and Zoopla's analysis shows that a smaller gap leads to faster price rises.

Compare that to before the Covid-19 pandemic when the average gap was 4%. A smaller gap means that there is more competition in the market now than there was before the pandemic.

Richard Donnell, executive director of research at Zoopla, said: “We expect there to be sufficient house price inflation to support more home moves.”

However, even with the market growing, investors have the opportunity to pay a below-market rate by investing in off-plan property.

Off-plan properties are usually available for a set price that is below the average market cost. That means that you can secure a deal today, and also benefit from higher rates of house price growth in the future compared to buying a completed property.

Even better, buying off-plan means you can wait longer for mortgage rates to fall and also benefit from reduced borrowing costs following construction.

Buying off-plan is a tried and tested way to benefit at both ends of the transaction, and that remains so in 2025.

Zoopla's analysis shows that prices are going to rise for the whole year to come – making this the best time to buy property and maximise your return on investment.

Want to learn more about the UK investment market? Or discover our latest property opportunities? Get in touch with the team today to start your investment journey in 2025.

UK property market starts 2025 in good health – Zoopla House Price Index December 2024

You may also be interested in...

Demand for investment property in the North West is far higher than in London and the rest of the UK

UK asking price record broken: Is this a good time to buy UK property?

Manchester is the leading UK tech destination