House Prices Take a Break Over New Year

House prices showed little change over the seasonal break as property professionals joined the rest of the country in celebrating Christmas and the New Year.

Data from the Office for National Statistics (ONS) revealed a 3.3 per cent year-on-year increase in property values to the end of November, bringing an average house up to £290,000 compared with £278,091 a year earlier.

House prices are rising the fastest in the North East, where prices were up 5.9 per cent in a year.

Prices were down 0.1 per cent in London, the only English region where property values fell in the year.

The ONS says the data metrics are generally improving and reflect growing confidence in the housing market, although this has not yet affected sales or prices.

Feel-good Factors

The report cites feel-good factors, including the Bank of England's interest rate cuts and house sales growing by 12.9 per cent year over year.

Halifax has published house price data for December. It notes a -0.2 per cent drop in values from November but a 3.3 per cent annual rise. The bank estimates the average house price to be £297,166.

Amanda Bryden, Head of Mortgages at the Halifax, said: “Prices fell back slightly in December, by -0.2 per cent, following five consecutive monthly increases.

“The housing market was broadly steady at the start of 2024, with house price growth taking off from the summer onwards. 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. Together, these elements meant mortgage demand picked up, hitting the highest level in over two years and back to levels seen pre-pandemic.”

Affordability Challenges for Buyers

Rival lender Nationwide has also published house price data for December.

The building society noted a 0.7 per cent rise from November and a 4.7 per cent annual increase to make the average home worth £269,426.

Nationwide's Chief Economist Robert Gardner said: “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 challenge was 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.”

Property experts expect the number of sales to improve over the next few weeks before stamp duty increases in April.

London estate agents Hamptons say the next few weeks will be crucial for buyers hoping to avoid large tax bills.