UK house prices posted faster gains in November. This marked the sharpest annual rise since February 2023. This shows strength in the property market. This is despite elevated borrowing costs. This was confirmed by official data on Wednesday.
Price Expansion is Stronger than Anticipated
Prices for an average house went up by 3.3%. This covered the 12 months to November. It is the biggest increase since February 2023. That followed a downwardly revised 3.0% rise in October. This data on house prices was published by the Office for National Statistics (ONS). This growth bucked some forecasts of a slowdown.
The Rental Market Continues to be Strong
Rents in the private sector also remained elevated. In December, they were 9.0% up on the year. This is a slight decrease. In November, it was 9.1% year on year. The rental market, like house prices, still wields pressure over tenants.
There Are Regional Cost Differences in Rent
There’s still considerable variation in rental prices regionally. And London had the biggest jump. Rents in London increased by an average of 11.5%. This speaks to the unique market dynamics of the capital. Rental growth and house prices were more mixed in the other regions.
Market Reaction and Outlook Ahead
Investors responded to other economic news. Earlier on Wednesday, inflation surprised on the downside. That prompted investors to raise their bets. They now expect cuts to Bank of England interest rates in 2025. This anticipation may have additional impact on the housing market. Lower interest rates might encourage demand. It also could affect affordability. The housing market, especially house prices, is still a crucial tell. It is a measure of overall UK economic health. Analysts will have an eye on future trends. They will analyze the effect of interest rates and inflation.
