Rents continue to climb too

UK house price inflation rose to 3.3% in the 12 months to November 2024, up from a revised 3% in the previous month, according to latest government data.
Having increased for the 11th consecutive month, the average UK house price reached £290,000 in November, £10,000 higher than the same month last year.
By region, annual price growth in England stood at 3.0%, bringing the average house price to £306,000. In Wales, prices rose 3.0% to £219,000, while in Scotland, house prices increased by 4.7% to £195,000. Northern Ireland saw the strongest growth, with prices rising 6.2% year-on-year to an average of £191,000 in the third quarter of 2024.
The ONS Private Rent and House Price data also showed that month-on-month, average house prices across the UK fell by 0.4% on a non-seasonally adjusted basis between October and November 2024. This compares to a steeper decline of 0.7% during the same period in 2023. However, on a seasonally adjusted basis, prices edged up 0.1% between October and November.
Among English regions, the North East recorded the strongest annual house price inflation at 5.9% in the 12 months to November. In contrast, London was the only region to report negative annual growth, with prices falling by 0.1%.
Average UK house prices increased by 3.3%, to £290,000 in the year to Nov 2024, this annual growth was up from 3.0% in the 12 months to Oct 2024.
— Office for National Statistics (ONS) (@ONS) January 15, 2025
Average UK private rents increased by 9.0% in the year to Dec 2024, this is down from 9.1% in Nov 2024.
➡️ https://t.co/Q0TPn9zgVu pic.twitter.com/szmVOcMNee
“The property market continues to stand strong, but while inflation figures saw a surprise dip today, the outlook still remains somewhat uncertain, and we simply haven’t seen interest rates fall as swiftly as expected over the last six months,” said Jonathan Samuels (pictured left), chief executive of Octane Capital.
“In fact, mortgage rates remain higher than they were this time last year and so, those looking to purchase are best advised to tread with a degree of caution and avoid the temptation to over borrow in hopes of beating the stamp duty deadline.”
For Amy Reynolds (pictured centre), head of sales at Richmond estate agency Antony Roberts, the latest numbers highlight the continuing pressure on affordability.
“Stubborn inflation continues to weigh on household budgets, and with the cost of borrowing still relatively high, potential buyers may sit on the fence until this changes,” she noted. “That said, we are seeing more applicants this month than in the final quarter of last year, some of whom are now in a position to buy because a first-time buyer has completed their chain. This leads me to have some concerns about the second quarter after the stamp duty holiday has ended.”
Meanwhile, the average private rent in the UK increased by 9% in the 12 months to December 2024, slightly down from 9.1% recorded in November.
Rents in England saw the sharpest growth, rising by 9.2% to an average of £1,369. Wales recorded an 8.5% increase, with average rents reaching £777, while Scotland saw a 6.9% rise to £991. In Northern Ireland, rents rose by 8.6% in the 12 months to October 2024, the latest period for which data is available.
In England, regional variations in rent inflation were significant. London reported the highest growth, with rents increasing by 11.5%, while Yorkshire and The Humber recorded the lowest growth at 5.4%.
“Rents are climbing fast, and there’s no sign of this slowing,” noted Alex Upton (pictured right), managing director of specialist mortgages and bridging at Hampshire Trust Bank. “The latest ONS data is yet another reminder of just how out of balance the rental market is. 2025 looks set to be a record-breaking year for rents.
“For property investors, this surge in rental prices offers a real opportunity. Even with the higher Stamp Duty rates, focusing on projects that maximise rental yields, such as refurbishment or conversion schemes, could deliver significant returns. For lenders, staying flexible and offering tailored solutions will be key to supporting landlords with these more complex cases.
“With home ownership increasingly out of reach, a strong and stable rental market has never been more essential. But landlords will need the right support to deliver for tenants.”
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