The combined value of UK housing has exceeded £9 trillion for the first time, according to new figures released by Savills.
After a challenging 2023, the market recovered with a £346 billion increase in value last year. This brings the total worth of residential property to more than three and a half times the country’s annual GDP, as reported by City AM.
Lucian Cook, head of residential research at Savills, pointed out that “Affordability pressures eased and prices returned to growth in many areas [in 2024], pushing the total value of the UK’s housing stock to another record high”.
The previous year saw difficulties due to rising borrowing costs and buyer hesitation, which slowed transactions. In August 2023, average mortgage rates for two- and five-year fixed terms climbed above six%. Over the following months, mortgage costs declined in line with Bank of England rate cuts. Mojo Mortgages data showed the average two-year fixed rate dropped to 4.7% by the close of 2024.
Early indicators for this year are positive. Rightmove’s index reported a 0.5% rise in asking prices in January, bringing the average listing price to £367,994.
“The confident start to 2025 continues, with more sellers coming to market and good levels of activity”, said Tomer Aboody, director at MT Finance.
Further movement is expected in the coming months. Lawrence Cook of Savills shared that with anticipated Bank of England rate reductions, more transactions could follow, particularly from second-time buyers who have delayed making a move until financial conditions improved.
Meanwhile, changes to mortgage regulations are being considered. Nikhil Rathi, CEO of the Financial Conduct Authority, confirmed in a letter that the regulator plans to “begin simplifying responsible lending and advice rules for mortgages, supporting home ownership and opening a discussion on the balance between access to lending and levels of defaults”.
First-time buyers are currently playing a strong role in market activity, encouraged to finalise purchases before the stamp duty holiday finishes on April 1. But some caution remains. Jeremy Leaf, a north London estate agent and former RICS residential chairman, warned that this surge could distort the wider picture, masking ongoing affordability concerns that may reappear later in the year.
Reference: Business Live
