The ONS released its private rent and house price data, showing a 9.1% increase in average private rents in the 12 months to November 2024.
In England, rents rose to £1,362 (9.3%), Wales to £772 (8.0%), and Scotland to £980 (6.5%).
Northern Ireland experienced a 9.0% rise up to September 2024.
London’s rent inflation was the highest in England at 11.6%, while Yorkshire and The Humber saw the lowest at 5.7%.
House prices increased by 3.4% to £292,000 in the 12 months to October 2024, with rises in England to £309,000 (3.0%), Wales to £222,000 (4.0%), and Scotland to £197,000 (5.5%).
Reaction:
Alex Upton, managing director of specialist mortgages & bridging at Hampshire Trust Bank:
“The rental market remains under intense pressure, with demand significantly outpacing supply. Recent figures from Pegasus Insights show that eight in ten landlords reported strong tenant demand in Q3, and Propertymark’s data highlights an average of nine prospective tenants competing for each available property.
“Without a notable increase in supply – and that doesn’t appear imminent – this imbalance will continue driving rents higher. I fully expect to see new rental records set in 2025.
“Despite the Stamp Duty changes announced in the Budget, property investment still makes a great deal of sense, particularly for those focusing on refurbishment or conversion projects.
“These strategies not only help maximise rental yields but also make better use of existing housing stock to meet the strong demand for quality homes.
“With limited progress on new builds, unlocking the potential of existing properties will be key to meeting tenant needs in the year ahead.”
Richard Harrison, head of mortgages at Atom bank:
“Although a second consecutive rise in inflation means we are unlikely to see the Bank of England reduce the base rate tomorrow, the market’s anticipation of further cuts and lower mortgage rates next year offers some optimism for potential homebuyers.
“The housing market has had a busy finish to 2024, with many prospective buyers looking to push on and get deals over the line before the new year.
“Figures from HMRC show that transactions in October were up by 21% on a year ago, while Rightmove reported that the number of sales being agreed is up by nearly a quarter compared with the same period in 2023.
“For all of the jitters in the build up to the Budget, the reality is that people need homes in which to live and we don’t have enough to meet that demand.
“While we keep a watchful eye on Labour’s plan to build, we should expect to see house prices continue to rise to new highs in 2025.
“While the prospect of lower mortgage rates will be welcome for many aspiring homebuyers, lenders must also grasp the opportunity to deliver better support to those who are currently underserved, such as buyers with smaller deposits or who have experienced temporary credit issues.
“We cannot allow homeownership to be out of reach for those who are more than able to repay a mortgage, but who need a more understanding approach from lenders.”
Chris Little, chief revenue officer at finova:
“As the year draws to a close, it’s encouraging to see the UK housing market close on a strong note, with overall house prices continuing to rise upwards.
“Yes, growth is measured, but in a year when the chatter around mortgage rates became very complex, stability is enough.
“There are still some ambiguities – the potential for higher US tariffs could muddy the waters – but it’s starting to feel like all the major market disruptions are behind us for now.
“In the new year, lenders will continue to play by offering competitive rates and flexible mortgage products. But we must continue to foster collaboration.
“The truth is that lenders and brokers must work together. We cannot lean on ‘one-size-fits-all’.
“In 2025, it will be up to us all to provide bespoke support to buyers who are prepared to step onto the housing ladders, especially as pent-up demand finally flows into the housing market.”
Ross Turrell, commercial director at CHL Mortgages:
“Today’s figures will provide investors with a little more festive cheer. In the face of challenging economic and political headwinds, the steady house price growth seen throughout 2024 highlights the enduring resilience of bricks-and-mortar investments in the UK.
“These figures reflect market activity during the uncertain lead-up to the Autumn Budget, so the fact that prices still grew should drive greater confidence and higher activity levels in the coming weeks.
“Looking ahead, there are plenty of reasons for optimism. For example, Nationwide predicts that house prices will rise by 4% in 2025, while Savills anticipates a 3.5% uptick in rental prices over the next 12 months.
“That said, with the Bank of England likely to hold the base rate tomorrow, property investors will need to consider their plans based on the current cost of borrowing.
“More positively, it is expected the Bank will cut rates multiple times in 2025, which should boost the market – this is supported by the fact that new buyer demand is up by 13%, according to Rightmove.
“As the market continues to grapple with a complex investment landscape, lenders must work closely with brokers to support growth.
“Enabling landlords to pursue new opportunities or better manage their existing portfolios will be crucial.
“This means providing brokers and borrowers not only with the right financial products but also the additional expertise and support they need to navigate an ever-changing market.
“If lenders adopt this approach, the market can start the new year on the front foot.”
