House prices grew by 4.7% during the 12 months of 2024, pushing the average property value to £269,426 as we begin the New Year.
This is according to the latest data from Nationwide which showed prices had risen by just 0.7% in December, compared with 1.2% in November.
Yet, with average prices finishing the year 4.7% higher than at the end of 2023, most property owners will have seen gains in 2024.
Homes in Northern Ireland experienced the biggest price rises during the year, increasing by 7.1% according to Nationwide’s House Price Index.
Northern regions typically saw higher price growth than southern areas with the North, North West, Yorkshire & The Humber, East Midlands and West Midlands seeing price rises averaging 4.9% year on year.
Southern England – including the South West, Outer South East, Outer Metropolitan, London and East Anglia – by comparison saw prices climb by 2.2% over the year.
Indeed, East Anglia was the weakest performing UK region in 2024 with an annual increase of 0.5%.
Robert Gardner, chief economist, at Nationwide said UK house prices ended 2024 on a ‘strong footing’ – although they were still just below the all-time high recorded in summer 2022.
He added: “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 is a challenge that had been 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.
He added: “As a result, it was encouraging that activity levels in the housing market increased over the course of 2024 with the number of mortgages approved for house purchase each month rising above pre-pandemic levels towards the end of the year.”
Stamp duty changes in March are expected to create ‘volatility’ in the housing market for the next three months as buyers forward their purchases to avoid the additional tax.
“This,” said Gardner, “will lead to a jump in transactions in the first three months of 2025 (especially in March) and a corresponding period of weakness in the following three to six months, as occurred in the wake of previous stamp duty changes. This will make it more difficult to discern the underlying strength of the market.”
Is 2025 the year to buy or sell a home?
Gardner went on to say house price activity should ‘gradually strengthen’ throughout the rest of the year.
Nicky Stevenson, managing director at national estate agent group Fine & Country, thinks we will see more stability in the market this year plus better opportunities for buyers.
“As 2025 unfolds, the urgency of pre-April transactions may ease, potentially leading to a more balanced market,” she said.
“Rising living costs and inflation could encourage some buyers to take a measured approach, but this also creates opportunities for those entering a market that may tilt in favour of buyers later in the year.
“If demand slows due to fewer buyers actively making purchases, sellers may feel pressure to lower prices or offer more favourable terms to attract buyers. This creates opportunities for those still in the market, as they might find it easier to negotiate better deals, potentially making 2025 a ‘buyer’s market’.”
She added: “Despite some challenges, 2025 presents a chance for the market to stabilise and achieve more sustainable growth.
“Buyers and sellers alike will adapt, finding opportunities even amid uncertainty and paving the way for a more balanced housing market in the years ahead.”
