The UK housing market has experienced a remarkable start to the year, outperforming the beginnings of 2024 and 2023. According to the latest figures from Zoopla, buyer demand is up by 13%, and there are 10% more homes available for sale. This surge in activity has driven property sales, supporting UK house price inflation, which has climbed by 2% in the year to December 2024. This is a notable improvement from the 0.9% dip observed a year prior. The increase in demand and inventory is likely due to a change in the UK stamp duty set to be put into effect at the start of April.

Zoopla's latest house price index highlights this growth as buyers hurry to complete their purchases before the introduction of higher stamp duty bills in April. The frenetic start to the year can be attributed to a race against time, as buyers aim to finalize transactions before the stamp duty thresholds drop and property taxes rise. This rush may also signal an anticipated decline in demand post-April once the stamp duty discount ends.

The January 2025 Zoopla House Price Index reports that new sales agreed have increased by 12% on an annual basis, while buyer demand has surged by 13%. A recent Zoopla report underscores this trend, revealing that house prices rose by 2% in the year to December 2024, reaching an average of £267,700. This is a striking contrast to the 0.9% decline in house prices recorded in 2023.

First-time buyers have significantly contributed to this heightened demand, with their interest rising by more than a third, marking the fastest growth rate since April 2023. This surge in activity among first-time buyers has played a crucial role in boosting the overall market dynamics.

Geographically, the highest growth in average house prices last year was observed in Northern Ireland, where prices increased by 7.7%, followed by a 3.2% rise in the North West of England. These regions have benefitted from rising wages, which have helped support the housing market. However, the research indicates that house prices are increasing more slowly in southern England, where growth rates are below 1.5%. In these areas, prices are already above average, and it is taking longer for rising incomes to adjust housing affordability.

The current market dynamics suggest a complex interplay of factors influencing the UK housing market. The immediate rush to buy, driven by the impending stamp duty changes, is a key factor propelling the market. However, this urgency may taper off once the new stamp duty rules come into effect, potentially leading to a cooling in buyer demand.

Zoopla's data provides valuable insights into regional disparities within the housing market. The pronounced growth in Northern Ireland and the North West of England highlights the impact of local economic conditions, such as wage increases, on housing affordability and market activity. Conversely, the slower growth in southern England underscores the challenges faced in regions with higher average prices and slower wage growth.

The housing market's robust start to the year also reflects broader economic trends, including consumer confidence and the availability of mortgage financing. The UK's economic recovery, coupled with favorable lending conditions, has likely contributed to the increased buyer activity and price growth observed in recent months.

Looking ahead, the market's trajectory will depend on various factors, including the pace of economic growth, changes in interest rates, and government policies affecting the housing sector. The end of the stamp duty discount in April is expected to be a pivotal moment, potentially leading to shifts in buyer behavior and market dynamics.

The UK housing market has witnessed a strong start in 2025, with notable increases in buyer demand and property sales. Regional variations highlight the diverse factors influencing market activity across the country. As the year progresses, the market will continue to evolve, shaped by economic conditions, policy changes, and buyer sentiment. The coming months will be critical in determining whether the current momentum can be sustained or if the market will experience a slowdown following the end of the stamp duty discount.

Richard Donnell, executive director at Zoopla, remarked on the recently released data, “The first few weeks of each year tend to provide a clear indication of how the rest of the year is likely to unfold. 2025 has started well, better than 2024 and 2023 which bodes well for market activity over the rest of the year, supported by evidence of more people looking to move.”