As 2024 draws to a close, December brings with it a mix of seasonal shifts and end-of-year reflections in the UK property market. By understanding the key trends from December, investors can effectively prepare for a busy and promising January. In this article, we’ll explore the latest property news from December and explore how these developments can inform your property investment strategy going into 2025.
Growing House Prices
The average UK house price has reached a new milestone, hitting a record high of £300,000. Property values have seen a 1.3% increase from November, continuing the positive momentum from October, and are up 4.8% year-on-year—the highest annual growth since November 2022. A reduction in interest rates is driving this strong growth, stimulating demand for mortgages, which is reflected in the highest number of mortgage approvals since August 2022.
This price surge is excellent news for buy-to-sell investors, who can expect improved returns on their investments. While rising prices may pose a challenge for some potential homeowners, there are still an abundance of opportunities on the market. As a result of this growth, buy-to-sell investors may want to consider diversifying their strategies, exploring buy-to-let opportunities where demand for rental properties remains strong, and renting becomes a more affordable option for many tenants. This approach allows investors to capitalise on both the growing rental market and the overall positive market trends.
Monthly Rent Grows Since Pandemic
Zoopla’s latest rental market report highlights a positive trend in the market, with average monthly rents now £270 higher than at the end of the Covid-19 pandemic. The average cost of renting has risen to £1,270 per month, equating to £15,240 annually, driven by strong demand, which remains nearly a third higher than pre-pandemic levels. Despite this, rents have risen at their slowest rate in three years, with the rental market anticipated to cool slightly, as average earnings have not kept pace with rent increase.
For buy-to-let investors, there are still significant opportunities to be found. Investing in more affordable areas could yield positive returns, with these regions expected to experience rent increases through 2025 as they “catch up” to the rest of the market. In particular, markets like Manchester and Liverpool are poised for growth, offering high demand and potential for attractive returns in the coming years.
House Sales to further increase
House sales are set to reach 1.15 million in 2025, surpassing the 1.1 million completions projected for 2024. This marks a 10% increase in sales compared to 2023, highlighting positive growth in the market. First-time buyers are expected to remain the largest group of purchasers, presenting a fantastic opportunity for buy-to-sell investors to benefit from this high demand.
While the south of England may experience slower growth due to affordability challenges, investors can take advantage of this trend by focusing on more affordable properties in northern England. With property prices more accessible in the north, investors can tap into a wider pool of potential buyers, maximising their return on investment.
January to March Sales Boom
With the Stamp Duty thresholds set to be reduced on March 31st, 2025, the property market is poised for a surge of activity between January and April. The announcement in the 2024 autumn budget has created significant momentum, encouraging investors to make property purchases before the deadline to minimise their stamp duty costs.
January 2025 is expected to be one of the busiest months in recent years, as investors aim to complete deals ahead of the March 31st deadline. For those looking to reduce overall investment costs, purchasing before the deadline could result in savings of thousands of pounds. Moreover, buy-to-sell investors can take advantage of this heightened market activity to drive demand, with the potential for strong returns. With average house prices reaching their highest levels since 2022, investors are well-positioned to benefit from both reduced costs and attractive ROI.
Liverpool Property News
There have been a couple of key developments and changes in December that could impact property investors in Liverpool.
Liverpool Car Park Fees Set to Rise
The Liverpool City Council are increasing street parking charges by 70% in the city centre, with the new fees scheduled to take effect in March 2025. If approved, the cost for 30 minutes of parking will rise from £1.20 to £2, and charges at council-owned car parks, such as the M&S Bank Arena multi-storey, will also increase. This decision is driven by the need to boost parking revenue and encourage greater use of public transport.
For buy-to-let investors in Liverpool, this presents an excellent opportunity to invest in properties offering parking. With rising parking costs, tenants with vehicles will increasingly seek properties that include secure parking, making such properties more lucrative. Additionally, this move indicates significant improvements to the city’s public transport network, which will enhance accessibility and raise property values. As reported last month, Liverpool stands to benefit from a portion of the £1 billion investment in the UK’s bus services, alongside planned improvements to train links. These enhancements will not only make Liverpool more accessible but also increase the long-term value of properties in the city.
Liverpool Introducing a Tourist Tax
Overnight visitors to Liverpool could soon have to pay £2 a night to stay in the city, as part of a proposed new tourist tax. The Liverpool City Council are exploring ways to aid the city’s growth and regeneration and have asked hotels and serviced accommodation providers to apply the city visitor charge. If approved could generate an estimated £6 million in revenue for the local economy.
This increased funding could help attract more events to Liverpool, positioning the city to compete with other major UK cities. Additionally, the city could reinvest the revenue into keeping its streets clean and more vibrant. For buy-to-let investors with short-term let properties, this could translate into higher demand from guests, driven by increased tourism and events, resulting in potentially greater rental yields. For buy-to-let investors with long-term residential properties, a cleaner and more attractive city enhances the appeal of their properties, making them more desirable to tenants seeking a healthy living environment.
Interested in investing in Liverpool property? Click here to check out our guide to property investment in Liverpool
December 2024 property market: Forecasting a Positive 2025
The December 2024 property market has underscored the key trends that will continue into 2025. With house prices and rents rising, the market presents even greater opportunities for investors in the coming year. Buy-to-let in Liverpool remains a strong investment choice, with the city’s proposed changes offering the potential for higher returns. December was a strong month for the property market, and 2025 looks set to build on this momentum.
Interested in exploring the wealth of property investment opportunities in the UK and don’t know where to start? Contact one of our award-winning property investment consultants today and we’ll help guide you towards achieving your investment goals.
Advantage Investment wishes you a happy and prosperous New Year!
