Sluggish Market Forecasts Record House Prices

House prices are booming, but it doesn’t seem like it for homeowners trying to sell.

The Halifax, one of Britain’s biggest mortgage lenders, puts the value of an average home a record of £298,083.

The Halifax monthly house price index for November adds that house prices are up 4.8 per cent year-on-year to November after a fifth monthly increase.

Since November 2023, average house prices have risen £13,641 from £284,442 a year ago.

Nevertheless, the market is sticky for sellers. It will likely standstill over the Christmas and New Year holidays when buyers have family celebrations to attract their attention rather than looking for a new home.

Expect higher prices, says Halifax

Halifax head of mortgages Amanda Bryden said: “UK house prices rose for the fifth month in a row in November, up by 1.3 per cent in the month - the most significant increase this year. This pushed the annual growth rate up 4.8 per cent, the most substantial level since November 2022. As a result, the record average house price in October edged higher still, with a typical property now costing £298,083.

“Latest figures continue to show improving levels of demand for mortgages, as an easing in mortgage rates boost buyer confidence. Despite these positive trends, many potential buyers and movers still face significant affordability challenges testing buyer confidence.

“As we move into 2025, positive employment figures and anticipated decreases in interest rates are expected to support demand. This should underpin further house price growth, albeit at a modest pace as borrowing costs remain above the average of a few years ago.”

The Nationwide, Britain’s other central mortgage lender, echoes their rival's figures.

The building society’s house price index for November shows a 3.7 per cent year-on-year increase, marking the fastest growth in house prices since November 2022.

Surprise house prices

Nationwide’s chief economist Robert Gardner said: “House prices increased by a robust 1.2 per cent month on month, after taking account of seasonal effects, the largest monthly gain since March 2022. House prices are just 1 per cent below the all-time high recorded in the summer of 2022.

“The acceleration in house price growth is surprising, since affordability remains stretched by historic standards, with house prices still high relative to average incomes and interest rates well above pre-Covid levels.”

“Housing market activity has remained relatively resilient in recent months, with the number of mortgage approvals approaching the levels seen pre-pandemic, despite higher interest rates.”

Online property portal Rightmove forecasts a 4 per cent rise in values in 2025, taking the market into uncharted territory of record house prices.

Rightmove says: “The signs are market momentum that we’ve seen this year will continue into next year, especially if mortgage rates drop to a level that gives greater affordability to some movers. The speed at which mortgage rates come down next year will be key in determining activity levels for some of the market’s traditionally busiest periods.”