Average house price in the UK 2007-2024
House prices in the United Kingdom (UK) declined slightly after soaring in July 2022. Nevertheless, in July 2024, prices reached a new peak, with the average home costing approximately 288,533 British pounds. That figure refers to all property types, including detached, semi-detached, terraced houses, and flats and maisonettes. Compared to other European countries, the UK had some of the highest house prices.
What is behind the brief decline in the market?
House prices are affected by multiple factors, such as mortgage rates, supply, and demand on the market. For nearly a decade, the UK experienced uninterrupted house price growth as a result of strong demand and a chronic undersupply. Homebuyers who purchased a property at the peak of the housing boom in July 2022 paid 14 percent more compared to what they would have paid a year before. Additionally, 2022 saw the most dramatic increase in mortgage rates in recent history. Between December 2021 and December 2022, the 10-year fixed mortgage rate doubled, adding further strain to prospective homebuyers. As a result, the market cooled, leading to a correction in pricing.
Is it more affordable to rent?
When considering the monthly mortgage or rental payments, buying a three-bedroom house has long been more affordable than renting. Nevertheless, in 2023, most of the UK regions observed the opposite trend. That is because of the strong house price growth relative to rents.
