2nd Jan 2025 08:05
(Alliance News) - Annual UK house price growth accelerated last month, in a strong end to the year, according to figures from Nationwide on Thursday.
House prices rose 4.7% on-year in December, picking up speed from a 3.7% rise in November. On-month, prices rose 0.7% in December, after a 1.2% rise in November from October.
"Mortgage market activity and house prices proved surprisingly resilient in 2024 given the ongoing affordability challenges facing potential buyers. At the start of the year, house prices remained high relative to average earnings, which meant that the deposit hurdle remained high for prospective first-time buyers. This is a challenge that had been made worse by record rates of rental growth in recent years, which has hampered the ability of many in the private rented sector to save," Nationwide analyst Robert Gardner said.
"As a result, 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."
Looking ahead to 2025, Gardner expects to see "volatility" stemming from stamp duty changes.
From the end of March, the temporary increase in the nil rate stamp duty thresholds will end. For first-time buyers of a home under GBP500,000, the nil rate band falls to GBP300,000 from GBP425,000 currently. For other home buyers, the nil rate band threshold is to decline to GBP125,000, from GBP250,000.
The measures were announced by Chancellor Rachel Reeves in the October autumn budget.
Gardner added: "This will lead to a jump in transactions in the first three months of 2025 (especially in March) and a corresponding period of weakness in the following three to six months, as occurred in the wake of previous stamp duty changes. This will make it more difficult to discern the underlying strength of the market."
By Eric Cunha, Alliance News news editor
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