UK house prices continued to climb for the fourth consecutive month in December, closing 2024 on a strong footing, according to Nationwide’s latest house price index. The average cost of a home rose to £269,426, marking a 0.7% increase from November and a 4.7% rise compared to December 2023.
This surge in annual price growth is the strongest since October 2022, when a 7.2% increase was recorded after market turbulence following the mini-budget announced by then-Prime Minister Liz Truss and Chancellor Kwasi Kwarteng.
Resilient Housing Market in 2024
Despite affordability challenges, the housing market demonstrated resilience throughout 2024. Robert Gardner, Nationwide’s chief economist, highlighted that mortgage activity and home prices exceeded expectations.
“Activity levels in the housing market increased over the year, with the number of mortgage approvals for house purchases surpassing pre-pandemic levels toward the end of 2024,” Gardner stated.
Over the year, the value of a typical UK home rose by nearly £12,000, up from £257,443 at the end of 2023 to £269,426 in December 2024.
Impact of Stamp Duty Changes
The government’s stamp duty changes in England and Northern Ireland are anticipated to influence market activity in early 2025. Initially introduced in September 2022 to raise the nil-rate threshold, the policy will end on 31 March 2025. First-time buyers currently enjoy relief on purchases up to £450,000, while the threshold for other buyers stands at £250,000.
Rachel Reeves, the Chancellor, confirmed during the October budget that these temporary changes will be reversed, sparking expectations of a surge in transactions before the deadline.
“This will create volatility, with a jump in activity in the first quarter of 2025, particularly in March, followed by a slowdown in the following months,” Gardner explained.
Regional Variations in Price Growth
All UK regions recorded house price growth in 2024. Northern Ireland emerged as the top performer for the second year running, with annual price growth of 7.1%.
In England, house prices rose by 3.1% year-on-year, but a distinct north-south divide remains. The north of England saw a 4.9% increase in the average home price, while southern England recorded a more modest rise of 2.2%.
Nathan Emerson, CEO of Propertymark, anticipates that the market may stabilize after the initial rush caused by the stamp duty changes. “A slower-paced market could create opportunities for buyers and sellers to negotiate better deals,” he noted.
