In 2024, UK house prices grew 3.3 percent annually, closing with an average price of £297,166. Despite a minor dip in December by minus 0.2 percent month-over-month, the market's upward momentum stemmed from falling mortgage rates, income growth, and anticipated stamp duty reforms. These factors eased financial strain for buyers, driving mortgage demand to pre-pandemic levels. The latter half of the year saw supply-demand imbalances fuel price increases, as sellers delayed listings, potentially awaiting further mortgage rate reductions. This supply bottleneck reinforced price growth in many regions.

Looking ahead to 2025, challenges persist. Mortgage affordability remains constrained due to slower-than-expected bank rate reductions. However, steady employment and policy incentives may sustain buyer demand. Modest house price growth is projected, contingent on stable economic conditions and gradual rate adjustments. The interplay of affordability pressures and demand dynamics will shape market performance. The latest update leaves the RPI at minus 26 and the RPI-P at minus 31. This means that economic activities are generally behind market expectations in the UK economy.

The Halifax House Price Index (HPI) is the UK's longest running monthly house price measure with data covering the whole country going back to January 1983. The index is based on the largest monthly sample of mortgage data, typically covering around 15,000 house purchases per month, and covers the whole calendar month. In March 2016 Markit announced that it would be acquiring the Halifax HPI from Lloyds Banking Group. Halifax continues to publish the index on behalf of Markit and both the name and the basic methodology remain unchanged. However, in May 2020, the annual growth measure was changed from the average of the last three months to just the latest month.

Home values affect much in the economy - especially the housing and consumer sectors. Periods of rising home values encourage new construction while periods of soft home prices can damp housing starts. Changes in home values play key roles in consumer spending and in consumer financial health. During the first half of this decade sharply rising home prices boosted how much home equity households held. In turn, this increased consumers' ability to spend, based on wealth effects and from being able to draw upon expanding home equity lines of credit.