The total value of the UK’s housing market rose by £22.3bn, or 6.3%, year-on-year in 2024, according to Savills’ latest market analysis.
Savills revealed the market’s value expanded to £379bn, equating to 1.1m transactions at an average sale price of £343,822.
The property firm said the £22.3bn increase was primarily driven by a £24.3bn rise in the use of mortgage debt, up 18.1% on 2023.
Savills said while equity put down by mortgaged buyers rose by £6.3bn, or 9.5%, spending among cash buyers fell by £8.4bn, or 5.4%, which in turn meant cash and equity fell to 58% of the total spend on housing.
Lucian Cook, head of residential research at Savills, said total spending shifted back into “positive territory” with stability returning to the mortgage markets.
“While the total size of the housing market is below its pandemic peak of £521bn, it remains £36bn larger than immediately before the pandemic,” he added. “Further interest rate cuts expected this year will widen the range of buyers coming to the market and we can expect their spending power to pick up over the next 12 months.”
The South East had the UK’s highest valued housing market, at £74.5bn, up £6.5bn, or 9.6%, on 2023. London followed, its market value increasing 2.3%, equating to £1.6bn, to £72.8bn, and then the East of England, with a 6.6%, or £2.6bn, rise to £42.6bn.
Northern Ireland saw the largest increase year-on-year, up 13.4%, or £607m, to around £5.1bn. This was followed by Scotland, up 9.8%, or £2bn, to £22.4bn.
“Clearly, with ambitious housebuilding targets, the government would like to see a stronger recovery in the size of the housing market,” Cook said.
“With constraints on public finances, it looks like that will need to be rooted in relaxation in mortgage regulations to further increase first-time buyer activity. Meanwhile, an improvement in activity among home movers is heavily dependent on further cuts in interest rates and an improvement in consumer confidence.”
