1. Price movements show signs of stability
Caution remained the dominant sentiment in the final quarter of 2024, shaped by the lead-up to the general election in July and the Labour Budget in October. Buyers and sellers continued adjusting to new fiscal measures and the gradual slowdown of the post-pandemic demand surge. As a result, price growth seen prior to the late-2022 Truss mini-budget has yet to reappear.
Despite this, price drops were minimal, with values slipping by just -0.2% in Q4. On an annual basis, the decline stood at -1.0%, a gentler correction compared to the -4.6% fall recorded in 2023. When measured against pre-pandemic levels, prices remain up by 9.6%.
Country homes echoed this trend, with a -0.5% decrease in Q4 and a -1.4% dip year-on-year. Some of this caution stems from Rachel Reeves’ announcement limiting inheritance tax relief for agricultural and business properties, adding further hesitation among high-end discretionary buyers.
2. Certain regions show greater resilience
Suburban markets and Inner Commuter areas led the way in Q4. Suburban locations recorded growth of 0.3%, while Inner Commuter areas held steady with only a slight drop of -0.1%. Towns close to London, such as Cobham (0.6%), Weybridge (0.6%), and Tunbridge Wells (2.8%), performed particularly well during the period.
These areas remain popular with families upsizing or relocating, helped by falling base rates and attractive mortgage offerings. Over the full year, the Midlands and the North posted the strongest annual growth at +0.8%, with Scotland maintaining flat prices. Meanwhile, the Wider South faced the steepest decline, down -2.5%.
Coastal areas continued to show weaker results, reflecting ongoing corrections after a sharp but brief spike in demand post-pandemic. That said, these adjustments are beginning to make properties in those locations more appealing to buyers seeking a lifestyle change.
3. Market ativity shows improvement
Sales agreed at £1 million and above – net of fall-throughs – were 10% higher in Q4 2024 compared to the same quarter in 2023, according to TwentyCi data. Activity was consistently stronger year-on-year during the latter half of 2024, with July seeing a 30% increase in transactions following the general election and October recording a 46% increase ahead of the Budget announcement. November saw slower progress at 6%, but December saw a rebound, with activity up 28% as buyers and sellers started adjusting to fiscal changes.
4. Looking ahead
Continued reductions in base rates during 2025 are expected to bring down mortgage costs and improve confidence in prime regional markets. While the introduction of VAT on school fees in January may tighten budgets for some families, regional areas with strong independent and state school options may attract more buyers moving out of larger cities.
Forecasts for prime regional property suggest growth of 2.0% across 2025, with cumulative growth of 18.2% projected over the next five years. By comparison, UK mainstream markets are forecast to grow by 4.0% in 2025 and by 23.4% over five years. Prime markets may experience more moderate growth due to the newly announced SDLT surcharge on second homes and changes to inheritance tax relief, which could affect purchasing power at the top end of the market.
Reference: Savills
