House prices are forecast to rise by 2.5 % by the end of the year, with the average standing at £267,200 as of January according to Zoopla's latest House Price Index.

The report highlighted continued growth in the housing market. Key indicators of activity showed an increase of 10% to 11% compared to the same period last year. The number of agreed sales rose by 10%, while the total number of homes listed for sale increased by 11%.

Despite this, house price inflation slowed slightly. Over the 12 months to January 2025, prices increased by 1.9%, compared to 2.0% in December 2024.

Regional variations in price growth remained evident. Northern Ireland recorded a 7.2% annual increase, followed by a 3% rise in the North West. In contrast, London and the South saw more modest gains of 1% to 1.2%.

One notable trend in early 2025 was a 14% increase in the number of flats entering the market, compared to a 5% rise in houses. The recovery of flat prices in 2024 contributed to higher supply, with flats now representing one in four properties available for sale.

Tony Hall, head of business development at Saffron for Intermediaries, said: “First-time buyers are racing to complete purchases before the Stamp Duty changes in April, and today’s figures really hammer that home.

“But even with an 11% rise in homes on the market, there remains a strain on supply of new housing.

“The last time the UK built enough homes was in 1979, when social housing was a priority. Since then, we’ve consistently fallen short.

“Proposed changes to affordability tests, like including rental payments, could help more buyers enter the market but also risk driving up demand without enough homes to meet it.”

He added: “It’s clear the Government is serious about the supply issue – they set out their stall last summer with the 1.5 million homes target.

“But it’s not just about building more homes. If we’re going to solve the supply issue, we need to think beyond traditional new builds and explore alternative routes to homeownership as well.

“For instance, there’s huge potential in repurposing underused commercial buildings in urban centres, making better use of spaces that are already there. Meanwhile, our research shows 64% of 18 to 24-year-olds would or already have considered pursuing a custom- or self-build project.

“Both present a valuable opportunity for brokers and lenders to expand their business and support borrowers in this specialist corner of the market.”

Nathan Emerson, CEO of Propertymark, said: “With Stamp Duty changes across England and Northern Ireland due to take effect from April, we have seen an increased keenness from many people to complete as soon as possible, to typically save themselves around £2,500 when purchasing an average priced property.

“The magnitude of house price growth does typically vary across different areas of the UK; however, with inflation now standing higher at 3%, we may see this influence base rate decisions over the coming months to help maintain overall stability within the economy.

“With an ever-growing population, all devolved governments must not only turn their attention to ensuring house building targets are delivered in the areas where there is a need, but also ensure that the right type of homes are being built in line with the shift in buyer behaviour.”

The housing market continues to be influenced by demand, economic conditions, and policy changes. The coming months will determine whether current trends persist or new challenges emerge.