The UK housing market concluded 2024 on a robust note with growth exceeding expectations, as reported by the Nationwide Building Society on Thursday. In December, house prices witnessed a year-on-year increase of 4.7%, surpassing the previous month's 3.7% rise and the forecasted 3.8% growth by economists. Monthly, however, the rate of price growth decelerated to 0.7% from November's 1.2%, defying predictions of a modest 0.1% rise.
The average property price in December stood at GBP 269,426. Although still slightly below the peak observed in the summer of 2022, Nationwide's Chief Economist Robert Gardner highlighted positive developments. He observed increased activity in the housing market throughout 2024, with the number of mortgage approvals for home purchases each month exceeding pre-pandemic levels by year-end.
Gardner noted that prospective changes to stamp duty could cause market fluctuations as buyers expedite purchases to bypass the additional tax. Nonetheless, he anticipated a gradual strengthening of underlying market activity. This improvement is expected due to easing affordability pressures, driven by slightly reduced interest rates and income growth outpacing house prices.
Gardner further projected that house price growth will stabilize within a 2-4% range in 2025, following the dissipation of stamp duty volatility. In 2024, the Bank of England lowered its benchmark interest rate by 50 basis points, with reductions implemented in August and November.
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