2024 was a significant year for the UK property market; Labour’s landslide general election win ended 14 years of Conservative rule in Britain, plus the Bank of England reduced interest rates in August after being held at 5.25% for a year. Here’s a roundup of the housing and mortgage markets at the end of 2024.

Recovery in sales

Buyer and seller confidence grew in 2024 with the promise of reduced interest rates. The end-of-year sales pipeline was the highest in four years¹, with 283,000 sales expected to reach completion in the first half of 2025. In the first 11 months of 2024, estate agents agreed an average of 6.1 sales per month – the highest number since 2021. Despite this increase in sales, house price growth remained muted, with Amanda Bryden, Head of Mortgages at Halifax commenting that “many potential buyers and movers still face significant affordability challenges and buyer confidence may be tested against a changeable economic backdrop”.

A buyer’s market

2024 was a buyer’s market and it is expected to remain that way in 2025. In the first half of 2024, there was some improvement in market conditions, with buyers more willing to pay over the asking price. But price sensitivity returned after the Autumn Budget and buyers are currently paying 3.6% below the property’s asking price.

First-time buyer activity

First-time buyers (FTBs) do not currently pay any Stamp Duty on properties worth up to £425,000, however this threshold hold will revert to £300,000 in April 2025. This policy change, confirmed in the Autumn Budget, has created urgency among FTBs, particularly those buying in regions where houses are more expensive. From April, only 8% of homes in London will be exempt from Stamp Duty for FTBs², so FTB demand has understandably increased in the capital. Tim Bannister, Rightmove’s property expert, advised, “We may see some negotiation tactics play out, particularly on properties close to the £300,000 mark, as both buyers and sellers try to mitigate their higher costs through the price agreed.”

Mortgage market

The reduction in Bank Rate in August 2024 came as a welcome relief to borrowers, but affordability remains a challenge for many buyers – particularly for those with smaller deposits. In December 2024, the average fixed mortgage rate was 4.83% for five years and 5.08% for two years, and Rightmove predicts that rates could fall to around 4.0% in 2025. While this is an improvement on spikes of 5-6% in 2023, it would still be significantly higher than pre-pandemic levels.

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¹ Zoopla, 2024

² Rightmove, 2024