The State of the UK Housing Market: Key Economic Indicators
Early in 2025, shifts shape the UK housing market and give investors key insights. Many focus on House in Multiple Occupation (HMO) properties. This report shows economic indicators that affect house prices, mortgage approvals, and construction rates. Data from the House of Commons Library guide the view.
Overview of House Prices
Measuring house price change is key to grasping the market. The UK House Price Index shows property prices across the UK rose 4.9% from January 2024 to January 2025. A seasonal view shows a small rise of 0.7% from December 2024 to January 2025. Regional house growth differs in the UK. The North East, Northern Ireland, and the North West see the highest growth. At the same time, London, the South West, and the East of England show slower increases. In Northern Ireland, price data use a different time frame up to the fourth quarter of 2024[^1^].
HMO investors gain insight from these regional differences. They can find areas with better rental potential when the North holds more affordable prices than the capital.
Mortgage Approvals Fluctuations
Mortgage approvals show market activity and connect directly to house sales. They fell very low during May 2020 and then climbed sharply toward the end of that year. In January 2025, approvals for house purchases reached 66,189. This marks an 18% rise from 55,941 in January 2024. Yet, the number did not change much from December 2024[^2^].
Steady approvals point to caution by both buyers and lenders. HMO investors should track these numbers, as high mortgage approvals might open more room for multi-occupancy projects.
Trends in Housing Starts and Completions
The construction sector faced hard times and a period of recovery after Covid-19. Data for Q4 2024 list 36,830 building completions in England. This figure is 2% above Q3 2024 but falls 9% below Q4 2023. In contrast, building starts reached 30,860—a 7% rise from the previous quarter and a 52% jump from Q4 2023[^3^].
Builders quickened efforts to meet new rules set in June 2023. These rules set new standards for energy use and electric car charging. In turn, HMO owners must plan updates to match these building needs.
Looking Ahead
New updates from trusted sources will bring fresh data to market watchers. Upcoming releases include figures from the UK House Price Index, mortgage data from the Bank of England, and building stats from the Ministry of Housing, Communities and Local Government. These reports will show more shifts in market trends.
The next reports come on:
- UK house price index: 16 April 2025
- Money and credit: Bank of England – 31 March 2025
- House-building: June 2025[^4^].
Conclusion
Today, the UK housing market shows a complex view for investors, especially those in HMOs. House prices grow and mortgage approvals point up numbers, yet high costs and regional differences ask for careful planning.
Investors need to use care and clear analysis as they work in the UK property market.
Sources
- UK House Price Index: data downloads January 2025
- Bank of England – Money and Credit January 2025
- Ministry of Housing, Communities and Local Government: House-building
- House of Commons Library – Housing Market: Key Economic Indicators
Feel free to explore these resources for more insights into the UK housing market.
