The average UK private rent increased by 8.7% in the 12 months to January 2025, according to provisional data from the Office for National Statistics (ONS).
This represents a slight slowdown from December’s 9.0% annual rise and is below the record-high increase of 9.2% recorded in March 2024.
Despite this moderation, rents remain significantly higher than a year ago, with the average private rent in Great Britain reaching £1,332 per month in January 2025—£106 more than in January 2024.
ANNUAL GROWTH
Alongside rising rents, house prices also continued to climb. The average UK house price reached £268,000 in December 2024, marking a 4.6% annual increase. This was up from 3.9% growth in November 2024 and represents a steady recovery from the downturn experienced in December 2023, when annual house price inflation fell to negative 2.7%.
The ONS has also updated its UK House Price Index (HPI), shifting the reference period from January 2015 to January 2023. This change reflects a decrease in the average size of properties sold and a greater proportion of transactions occurring in more affordable areas, resulting in a 7.9% downward revision to the “average” UK property price series.
REGIONAL HOUSE PRICE TRENDS
House price growth varied across the UK nations and English regions:
- England: The average house price stood at £291,000 in December 2024, up 4.3% year-on-year — an acceleration from the 3.4% annual increase in November 2024.
- Wales: Prices rose 3.0% to an average of £208,000, though this was a slowdown from the 3.7% annual increase recorded in November 2024.
- Scotland: The 6.9% annual rise in house prices took the average to £189,000, up from 5.9% growth in November 2024.
- Northern Ireland: House prices increased by 9.0% year-on-year, reaching £183,000 in Q4 2024 — a £15,000 rise compared to the previous year.
LONDON HOUSE PRICES STALL
Among English regions, the North East recorded the highest house price inflation in the 12 months to December 2024, rising 6.7% — slightly above the 6.4% increase in November 2024.
Meanwhile, London experienced no house price growth year-on-year, with 0.0% inflation in December 2024, down from 0.5% in November 2024. This stagnation highlights the continued affordability pressures in the capital, where house prices remain the highest in the UK.
MARKET OUTLOOK
While house prices and rents continue to rise, the pace of rental growth is beginning to slow. The ongoing challenges of affordability, alongside rising mortgage rates and policy changes, may continue to shape the housing market in 2025. However, with regional variations in price growth and demand, the market remains highly localised, with some areas seeing stronger price inflation than others.
Richard Harrison, head of mortgages at Atom bank, said: “The latest ONS figures underline what a strong year 2024 was for house price growth, with prices rising at their fastest rate since February 2023. Even with the unwelcome news of resurgent inflation, it is unlikely that 2025 will be much different.
“Recent data out from Rightmove suggests the gap between supply and demand has narrowed, but it’s still there, pushing prices ever higher. Record high house prices have become the norm, and I expect this trend to continue.
“Those hoping to purchase a home will have welcomed the cut to base rate, a move which has already fed through into lower mortgage rates from many lenders. While today’s inflation news may reduce the chance of a cut in March, the expectation of additional cuts to come this year, coupled with the increasing availability of higher LTV mortgages, will be further encouragement for those buyers.
“With house prices on the ascent, lenders who are serious about helping first-time buyers have to ensure they are delivering for those with smaller deposits. Otherwise the market will become even more reliant on the ‘Bank of Mum and Dad’, freezing out those who cannot turn to well-off loved ones.”
