House prices in December 2024 were 3.3% higher than the same month a year earlier, data from Halifax’s latest House Price Index (HPI) has revealed.
According to the index, the average house price throughout the month stood at £297,166.
This marked a monthly change of -0.2%, following five consecutive monthly increases.
However, quarter-on-quarter, prices rose slightly, increasing by a marginal 1.4%.
Amanda Bryden, head of mortgages at Halifax, said: “UK house prices finished 2024 up 3.3% over the year, with the average house price £297,166.
“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.”
Bryden added: “In many areas across the country, house prices were also buoyed by demand outstripping supply, possibly further amplified by homeowners holding off putting their property on the market – perhaps in anticipation of mortgage rates reducing further.
“Where does that leave the housing market for 2025?
“While the housing market has been supported in recent months by falling mortgage rates, income growth and the announcement on upcoming Stamp Duty policy changes, mortgage affordability will remain a challenge for many, especially as the Bank Rate is likely to come down more slowly than previously predicted.
“However, providing employment conditions don’t deteriorate markedly from a more recent softening, buyer demand should hold up relatively well and, taking all this into account, we’re continuing to anticipate modest house price growth this year.”
Reaction:
Nathan Emerson, CEO of Propertymark:
“Our member agents recently reported that the overall number of properties achieving their asking prices has nearly doubled from 6% to 11% showing a real desire and confidence from prospective and current homeowners to approach the buying and selling process.
“As people start to feel more settled within their financial position, and with an expected rush as many people across England and Northern Ireland provision themselves to navigate Stamp Duty rises from April, we expect to see an upbeat and confident start to the year.”
Mark Harris, chief executive of SPF Private Clients:
“Modest house price growth is being underpinned by borrowing costs which, while softening, remain higher than many borrowers were paying just a few years ago.
“With HSBC, Halifax and Leeds Building Society among those lenders reducing some of their mortgage rates this month, the new year has got off to an encouraging start.
“Borrowers will be hoping that other lenders follow suit and that the Bank of England delivers further rate reductions, helping ease affordability concerns.”
Amy Reynolds, head of sales at Antony Roberts:
“While it’s still early in the year, there are encouraging signs for the housing market. Some lenders have already started to cut their fixed-rate mortgages, likely in response to further expected base rate cuts this year.
“We’re seeing a pick-up in activity from first-time buyers, perhaps trying to take advantage of the stamp duty concession before it ends in March, and a good number of market appraisals, which is often a precursor to a strong Spring market.
“While all this suggests growing confidence, it’s too soon to say for certain how the market will unfold.”
Jason Tebb, president of OnTheMarket:
“The housing market continues to evidence remarkable resilience, with encouraging levels of activity and interest.
“Affordability is keeping a lid on property values to an extent asbuyers are unwilling or unable to pay inflated prices.
“Higher interest rates have an impact on activity and willingness to commit to a property purchase so news that some lenders have started cutting their mortgage rates this month, combined with expectations of further base rate reductions this year, should boost confidence and transactions – a better indicator of the health of the market than house price movements.
“A flurry of activity ahead of the end of the Stamp Duty concession ending in March should make for a busy spring market.”
Karen Noye, mortgage expert at Quilter:
“Despite the challenges it faced throughout 2024, the housing market ended the year looking considerably stronger than many might have anticipated 12 months ago.
“This annual growth is indicative of a remarkable level of resilience within the housing market.
“It has battled ongoing headwinds of high borrowing costs and affordability pressures for a long while now, yet demand seems to have been sustained and the market may even now be adjusting to the ‘new normal’ of higher but more stable interest rates.
“2025 will not be without its own fair share of challenges, however, and the changes to stamp duty, which are due to come into effect in April, could weigh heavily.
“For home movers, the current Stamp Duty threshold of £250,000 will halve to its previous level of £125,000, meaning the process will become even more costly.
“First-time buyers are a critical element of the housing market, but piling on additional affordability pressures at a time when purchasing a first home is already extremely difficult means we could see a reduction in such purchases.
“This would not only be disappointing news for those who had hoped to take that first step, but it would also likely ripple across the market and we could see a ‘gluing up’ effect if chains stall and transactions slow as a result.
“In addition, the Bank of England looks unlikely to make any drastic changes to the base rate, so while mortgage rates are expected to ease, it will be only gradually.
“Nonetheless, the prospect of even slightly lower rates could be enough to help prop up demand for now.”
Tomer Aboody, director of MT Finance:
“As mortgage rates came down throughout last year, we have seen a corresponding rise in prices and activity in the housing market, as confidence and affordability enables buyers to take the plunge.
“With tax changes coming in 2025, along with Stamp Duty amendments brought in by the new Chancellor, the forthcoming year may be sightly different as buyers could be more cautious.
“We are hoping for some of the feel-good factor from 2024 to carry on in this forthcoming quarter, with sellers coming to market and increasing volumes.”
Jeremy Leaf, north London estate agent and former RICS residential chairman:
“Although reflecting their customer mortgage offers before the Budget at the end of October, these always-reliable figures confirm what we have been seeing on the ground – in other words, buyers are taking advantage of the improved choice of property and negotiating hard which is resulting in some prices softening.
“Looking forward, nervousness remains as the full impact of the Chancellor’s decisions affect activity and the improved interest from first-time buyers to take advantage of disappearing beneficial Stamp Duty rates gradually eases out of the figures.”
Rachael Hunnisett, director of April Mortgages:
“These figures show that the housing market’s recovery hit a minor bump in the road in December, but that is not unusual for this quieter time of the year.
“Sellers in a hurry are more likely to be flexible on asking price to offload their property quickly.
“Recent data sets from the likes of the ONS and Nationwide have shown robust house price growth, so a slight readjustment is unlikely to be indicative of a downward trend.
“2024 is still a year of stabilisation for the property industry, following the volatile landscape that we endured in the previous year.
“This year also has the potential to be strong, if market conditions remain favourable for buyers.
“We are likely to see activity pick up again in the coming months with homeowners rushing to beat April’s Stamp Duty deadline.
“However, longer-term, homeowners’ ability to move up the property ladder will rest on the outlook for interest rates.
“The recent cut down to 4.75% played a pivotal role in boosting buyer confidence in 2024 and if interest rates continue to fall, this will surely be another shot in the arm for the industry.
“The volatility in pricing trends could still be pushing potential buyers to sit on the fence, so our advice is to speak to a professional mortgage advisor and think about how much risk you are comfortable with before choosing the right mortgage deal.”
Jonathan Hopper, CEO of Garrington Property Finders:
“December’s dip in house prices is likely to be little more than a pause for breath before the January bounce.
“Across the property market as a whole, business has been brisk during the first few days of the year.
“Pent-up demand is beginning to surface and several property portals reported record Boxing Day traffic.
“Activity is especially strong among first-time buyers, many of whom are racing to get into their new home before the stamp duty thresholds change at the end of March.
“This sense of urgency has led some first-timers to view in haste and offer high in order to do a deal quickly and give themselves a fighting chance of completing their purchase before the tax changes take effect.
“But higher up the market, things are proving tougher for sellers. A surge in the number of homes for sale has given buyers an abundance of choice, and with it the leverage to drive a hard bargain.
“In response, many sellers are having to hold down their asking prices or risk having their home sit unsold on the shelf.
“At the same time, most wealthy buyers remain highly price sensitive. With plenty of prime property to choose from, many are prioritising value, taking their time and negotiating hard – all of which is keeping price growth in check.
“With interest rates set to fall during 2025, cheaper mortgages will inject additional momentum to the market.
“But the pace of price rises is likely to stabilise once the temporary distorting effect of the Stamp Duty changes is past.”
