Understanding the Current Housing Market: Key Economic Indicators

Introduction

We study the UK housing market to learn about the economy. House prices, mortgage approvals, and building rates are key signs for property investors, especially those focused on House in Multiple Occupation (HMO) properties. This article takes a close look at these signals and what they mean for investors.

Recent Trends in House Prices

The UK House Price Index shows prices went up in January 2025. House prices increased by 4.9% over the year from January 2024 to January 2025. On a seasonally adjusted basis, prices grew 0.7% between December 2024 and January 2025. These figures show a lively market, though growth shifts from one region to another.

In the North East, Northern Ireland, and North West, gains are high. These areas hint at new opportunities for buyers. In London, the South West, and the East of England, gains are slower. This fact may point investors to areas where change is happening (UK House Price Index, 2025) [1].

Mortgage Approvals and What They Indicate

Mortgage approvals help show what future home sales might be. The Bank of England shows that mortgage approvals increased. In January 2025, 66,189 approvals were recorded. This is an 18% rise from January 2024. Approvals stayed near December 2024’s figures [2].

This rise after the COVID-19 lows shows buyer trust returning. For investors in HMO properties, a rise in approvals can hint at a stronger rental market.

House Building: Starts and Completions

Building counts add more insight into the housing market. After a deep drop during the pandemic, England sees signs of recovery. In Q4 2024, house building completions reached 36,830. This marks a 2% rise compared to the previous quarter, though it is 9% lower than Q4 2023. At the same time, house building starts reached 30,860—a 52% increase from the previous year. These signs show that developers are hopeful for the future (Ministry of Housing, Communities and Local Government, 2025) [3].

Some developers moved their work ahead of time to meet new building rules set in June 2023. The rules aim to improve energy performance and get properties ready for electric vehicle charging points [4]. These changes matter for property investors because they might alter building costs and home values, especially for HMO properties that may need changes to meet these rules.

Conclusion

Knowing the economic signs in the housing market is key for anyone interested in property investment, especially in HMO properties. Current information shows house prices and mortgage approvals on the rise while building activity shifts. With growth that varies by region, investors have a chance to find promising areas and think about the impact of new building rules.

Staying alert to shifting economic facts helps investors make smart property decisions.

Sources

1. UK House Price Index: Data Downloads January 2025
2. Bank of England: Money and Credit
3. Ministry of Housing, Communities and Local Government: House-Building
4. New Building Regulations – Energy Performance Standards

This explanation shows how key economic signs in the housing market help investors make better property choices.