Positive news as 2024 ends with a resilient UK housing market

As 2024 ends and 2025 begins, there has been improvement in buyer demand across the residential market, across to the Royal Institution of Chartered Surveyors (RICS).

According to the organisation’s latest survey, national house price growth is continuing to strengthen and buyer demand still maintaining an upward trend.

Despite higher mortgage interest rates, the near-term outlook for market activity remains relatively positive.

The survey’s national house price indicator, in terms of net balance, posted a figure of +25 per cent in November, up from +16 per cent in October.

This marks the fourth consecutive monthly increase, further cementing the upward trajectory of house price growth observed since the summer.

Respondents also expect house prices to continue rising over the next three and 12 months, reflecting a robust outlook for the year ahead.

New buyer enquiries maintained positive momentum, recording a net balance of +12 per cent – largely unchanged from the previous month and highlighting a modest but sustained recovery in buyer demand.

However, agreed sales volumes remained broadly flat, with a net balance of plus one per cent compared to plus eight per cent last time round.

Looking ahead, a net balance of 19 per cent of respondents anticipate an increase in sales activity over the next three months, although this figure is more moderate than last month’s reading.

Supply-side trends were also positive, with new instructions rising for the fifth consecutive month, as evidenced by a net balance of +17 per cent.

Nevertheless, market appraisals in November were on par with levels seen a year ago, which could signal a potential slowdown in the pipeline of new listings as we move into 2025.

Looking across to the lettings market, tenant demand declined slightly in November, with a net balance of minus one per cent, marking the first decline since 2020.

This reduction may reflect seasonal factors, as the monthly November lettings dataset is not seasonally adjusted.

Meanwhile, landlord instructions continued to fall, with a net balance of –13 per cent, contributing to the ongoing imbalance between supply and demand in the rental sector.

Despite the slower demand backdrop, rental prices are forecast to edge higher, with a net balance of +29 per cent of respondents expecting increases in the near term.

RICS head of market analytics, Tarrant Parsons, said: “Although the latest survey results continue to signal a steady improvement in buyer demand across the residential market, the broader macro environment is likely to pose additional headwinds moving forward.

“Most significantly, the recent rise in mortgage interest rates may curtail the recovery in market activity before long, and this is reflected in the slightly less optimistic sales expectations data coming through this month.

“Moreover, measures of consumer and business confidence across the economy have deteriorated of late and, if sustained, this could begin to feed through into housing market conditions in the months ahead.”