House prices are set to jump over the coming years on the back of higher-than-expected income growth, property firm Zoopla has reported.
Following growth of 1.5% in the year to October, Zoopla forecast on Friday that prices would increase by 2.5% in 2025 and by 7.5% over the coming three years.
“The housing market has been resilient in the face of higher borrowing costs over the last two years,” Zoopla executive director Richard Donnell commented.
“Higher income growth and lower mortgage rates have helped reset housing affordability faster than many expected over 2024.”
The average house cost £267,200 in October, up by £3,900 year on year, as prices grew across every region of the UK.
The sales pipeline had surged 30% in the meantime, which Zoopla said would translate to a jump in activity early next year, over which 1.15 million completions were anticipated.
“As we are approaching the end of the year, we are already seeing more buyers entering the market which is not typical for this time of year,” Matt Thompson, sales head at estate agency Chestertons, said.
He added an uplift to stamp duty due next April had in part driven activity, while falling mortgage rates had helped to boost buyer confidence.