House prices fell unexpectedly in November
According to Rightmove's report, in November 2024, UK house prices saw an unexpected fall of 1.4 per cent compared to the previous month. However, the average property listing price still rose by 1.2 per cent in November 2024 compared to the same month last year. This unexpected drop puts the average UK property price in November at £366,592.
Rightmove noted that this November's drop was larger than the usual seasonal 0.8 per cent drop over the same period in previous years, which could be linked to market nervousness around the Autumn Budget. Nonetheless, buyer demand surged by 23 per cent compared to the same period last year, demonstrating the continued strength of demand in the market.
Market activity and changes in lending rates
Despite the Autumn Budget creating some uncertainty in the market, the number of sales on the market achieved a 26% year-on-year increase. This may be linked to the fall in lending rates in November and the market's optimism for 2025. The average house price for a first home for a first time buyer in the UK also rose by 0.9 per cent compared to the same period last year, but was slightly lower than the previous month, with the average total price per home reaching £225,340.
Market experts' views
Rightmove's experts say that the post-Budget stamp duty increase has had a significant impact on the market. However, a second bank rate cut and optimism about the future appear to have eased the trend, at least temporarily. In terms of short-term trends, the overall picture of market activity remains positive compared to the same period last year. This sets the stage for predictions that both house prices and the number of homes sold will be stronger in 2025, particularly if mortgage rates fall sufficiently to significantly improve affordability for the wider mass market.
Changes in house prices by region
Looking at annual increases across the UK, all regions except the South East and South West have seen increases. The North East (+4.3 per cent) saw the highest increase, while the much talked about London region showed a 1.5 per cent rise. However, in terms of monthly increases, all regions except the East Midlands showed a fall. The London region also showed a big drop of 1.7 per cent in terms of monthly increases, but the average total price was still high at £683,316.
House price rises and falls by London borough
Compared with November 2023, house prices in the London boroughs of Merton, Tower Hamlets and Camden have risen by 7.2 per cent, 6.0 per cent and 4.6 per cent respectively, occupying the top three places in the list of annual house price increases in London. Out of a total of 32 London boroughs, 23 realised year-on-year house price rises, while nine saw falls. Of these, the Brent region saw the largest fall in house prices, down 3.1 per cent.
Rents and yields
According to October 2024 rental data released by Homelet, average monthly rents in London reached £2,211, up 0.9 per cent year-on-year. Based on the average London property price in November 2024 and the average London rent in October 2024, the annual yield is around 3.6%.
Housing transaction cycle and number of agency listings
According to Rightmove, the average number of days to sell a property in the UK increased by one day in October compared to September and was unchanged from the same period in 2023. The time taken to sell a property in London, where house prices are higher, trended slightly higher, but the average number of days to sell a property in October was still down four days compared to a year ago. In addition, the average number of properties in the hands of each agent remained high, further confirming the strong activity in the UK property market.
In summary, the UK property market saw an unexpected fall in November 2024, but the overall trend remains positive. As inflationary pressures continue to subside in the UK and further interest rate cuts are likely to be introduced, 2025 may become an even more rewarding year.