House Prices Hold Strong: Steady Growth Sparks Market Optimism

House prices grow 2.9%, driven by demand and limited supply.

Annual house price growth has remained steady at 2.9%, indicating resilience in the property market despite economic uncertainties. This positive trend suggests that demand for housing remains robust, supported by factors such as stabilising mortgage rates, increased buyer confidence, and a continued shortage of available properties.

One of the key drivers behind this sustained growth is the relative affordability of borrowing compared to previous years. While mortgage rates rose sharply in 2023, they have since stabilised, encouraging more buyers to enter the market. Lenders have also introduced more competitive mortgage products, making homeownership more accessible.

Regional disparities continue to shape the market, with Northern Ireland experiencing the strongest annual price growth at 5.9%, followed by Scotland at 3.8%. This suggests that while some parts of the UK are seeing stronger price increases, the overall market remains in positive territory.

Another factor contributing to price resilience is the continued lack of housing supply. With fewer new homes being built and existing homeowners hesitant to sell, competition for properties has kept prices from falling significantly.

The upcoming changes to stamp duty in April have also influenced buyer behaviour, prompting many to complete transactions before the new rates take effect. This has provided a short-term boost to market activity, particularly among first-time buyers.

Furthermore, the rental market remains highly competitive, with rising rents making homeownership a more attractive option for those who can afford to buy. This has added to demand, particularly in urban areas where rental costs are surging.

Overall, the steady 2.9% growth rate reflects a balanced market. While affordability remains a challenge for some, the underlying demand for housing continues to support price stability, making the UK property market an attractive investment opportunity.