Analysts predict 3% rise in property prices in 2025
The average property price in the UK currently stands at £269,426, reflecting a slight dip from the peak reached in the aftermath of the post-lockdown housing boom two years ago. Back in August 2022, during the height of that frenzy, the typical cost of a home across the UK was £273,751. This marked a significant surge in property prices, driven by a combination of factors including low interest rates, pent-up demand, and a shift in housing preferences as people reassessed their living needs during the pandemic.
However, according to the latest data from the Nationwide House Price Index for 2024, the current figure is somewhat lower than the peak, suggesting that the market has cooled down from the intense conditions of 2022. Despite this, it’s important to note that the market has remained resilient overall. In fact, the December 2024 property price index shows a 4.7% increase compared to the start of the year, highlighting that the housing market is still experiencing a level of growth, albeit more measured than the rapid price escalation observed earlier.
This annual rise, though more modest compared to the extreme hikes seen during the pandemic, indicates that demand for property remains relatively strong. Various factors, such as ongoing low supply, higher borrowing costs, and a shortage of housing, continue to contribute to upward pressure on prices. Moreover, while some experts had predicted a sharp correction following the boom, the 4.7% increase suggests that the market is stabilizing and adapting to new economic conditions, with prices still trending higher year-on-year.
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