UK house prices ended 2024 on a Strong Footing.
The latest Halifax House Price Index reported a small monthly decline in December of -0.2% making the average price £297,166. Although the quarterly change was +1.4% and the overall annual change ended up at +3.3%.
Amanda Bryden, Head of Mortgages at the Halifax said
“In the latter half of the year, house prices grew in response to the falls in mortgage rates, alongside income growth, both leading to financial pressures somewhat easing for buyers. Impending changes to Stamp Duty thresholds have also given prospective first-time buyers even greater motivation to get on the housing ladder and bring any home-buying plans forward.
She went on to predict for 2025 – “We’re continuing to anticipate modest house price growth this year.”
The latest Nationwide House Price Index reported a strong end to the year with monthly house price growth in December at +0.7%. It reported a higher annual change at +4.7%, but with a lower average price of £269,426.
Commenting on the figures, Robert Gardner, Nationwide’s Chief Economist said:
“UK house prices ended 2024 on a strong footing, up 4.7% compared with December 2023, though prices were still just below the all-time high recorded in summer 2022”
He went on to say – “It was encouraging that activity levels in the housing market increased over the course of 2024 with the number of mortgages approved for house purchase each month rising above pre-pandemic levels towards the end of the year”.
In terms of his 2025 predictions – “providing the economy continues to recover steadily, as we expect, the underlying pace of housing market activity is likely to continue to strengthen gradually as affordability constraints ease through a combination of modestly lower interest rates and earnings outpacing house price growth. The latter is likely to return to the 2-4% range in 2025 once stamp duty related volatility subsides.”
The latest Hometrack report gave a more conservative figure of +1.9% for annual house price inflation. However, as this report breaks down figures into regions, it states that Belfast tops the list at +6.9%, much higher than second place Manchester at +3.4%.
Regarding the outlook for 2025, the report states – “The outlook for the housing market in 2025 will be dictated by the strength of the economy and labour market as well as the trajectory for mortgage rates, all set within the context of housing affordability.”
It goes on to say – “UK house prices are expected to increase by 2.5% in 2025.”
The latest Rightmove Report stated that ‘Record number of sellers in promising start to 2025’, but went on to say there are ‘uncertainties ahead.’
The report states that the average price of property coming to the market has risen by +1.7%. However, it states that the upcoming changes to Stamp Duty on the 31st March and uncertainty around interest rates could have an impact.
In terms of their 2025 predictions, Colleen Babcock, property expert at Rightmove said “ All of these very early lead indicators at the start of this year point to a busier 2025. Rightmove forecasts a larger number of transactions this year of 1.15 million, and an average asking price increase of +4%.”
Our Thoughts
The UK housing market ended 2024 with impressive resilience, as reflected in the Halifax, Nationwide, and Hometrack reports. All are predicting modest house price growth in 2025 which can be viewed as positive news for homeowners.
As far we are concerned, we have seen a marked increase in activity in January. Although we would usually expect a seasonal bounce back after the festive season, it does feel busier than in recent years, with people seeming more motivated and buying/selling in a quicker timeframe.
Mortgage rates have crept up in January and there are Stamp Duty changes with effect from 1st April. Whether this will dampen activity and have an effect on house prices, only time will tell. We will have a clearer idea by the time Spring has sprung.
