The total value of all homes across the UK has passed £9 trillion for the first time, according to new research by property firm Savills.
After a brief slump in 2023, the UK’s housing stock grew by £346bn last year – meaning it is now more than 3.5 times the annual GDP of the UK.
“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,” Lucian Cook, head of residential research at Savills, said.
Property prices came under pressure in 2023 due to higher borrowing costs and uncertainty among buyers, who postponed transactions. In August 2023, average mortgage rates on two and five-year fixed-rate products peaked at over six per cent.
But mortgage rates have slowly started to fall over the past 12 months, in line with successive cuts to the Bank of England base interest rate.
The average rate for a two-year fix fell to 4.7 per cent at the end of 2024, according to Mojo Mortgages.
Source: Savills research
House prices to rise further this year
Rightmove’s house price index found that the average price of a property coming to market for sale rose by 0.5 per cent in January to £367,994.
“The confident start to 2025 continues, with more sellers coming to market and good levels of activity,” Tomer Aboody, director of specialist lender MT Finance, said.
Savills’ Cook added: “With the Bank of England expected to cut interest rates further over the coming months, we anticipate an increase in transactional activity, particularly among second-steppers who have held off moving until rates fall.”
Mortgage lending requirements are also set to loosen: The FCA chief executive, Nikhil Rathi, said in a letter that the body will “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”.
While first-time buyers are expected to boost overall activity in the short term, with buyers rushing to complete before the end of stamp duty relief on April 1, some have cautioned their heightened presence has distorted the market in 2025.
Jeremy Leaf, north London estate agent and former RICS residential chairman, said that the stamp duty deadline is masking “ongoing affordability concerns” in the market.