House prices have increased by 3.7% in the last year according to Nationwide, which described this type of growth as ‘surprising’.
This was the fastest rate of annual growth the housing market has experienced since November 2022 and comes following a 2.4% price increase in October.
Over the month the typical price of a UK home rose by 1.2% and is now £268,144. Nationwide said prices were now just 1% below the all-time peak.
Robert Gardner, Nationwide’s Chief Economist, described November’s growth as ‘robust’. He added: “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.”
With the stamp duty breaks due to end in March, experts thought there may be a ‘rush’ in the property market as buyers sought to make their purchases whilst the tax relief was still in place.
But Gardner was not so sure this was the reason for the rebound. “The pickup in price growth is unlikely to have been driven by upcoming stamp duty changes,” he said, “since the majority of mortgage applications commenced before the Budget announcement.
“Housing market activity has remained relatively resilient in recent months, with the number of mortgage approvals approaching the levels seen pre-pandemic, despite the higher interest rate environment.
“Solid labour market conditions, with low levels of unemployment and strong income gains, even after taking account of inflation, have helped underpin a steady rise in activity and house prices since the start of the year. Household balance sheets are also in good shape with debt levels at their lowest levels relative to household income since the mid-2000s.”
Going forward he said it was tricky to predict how the market would play out in 2025 because of the stamp duty changes which would provide an incentive for buyers to bring forward home purchasing plans.
“This is likely to 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,” he added.
Moving in before Christmas
The strong house price data from Nationwide comes just as the Bank of England revealed mortgage approvals had hit their highest rate since the ill-fated mini-Budget in September 2022.
It showed borrowing had soared to £3.4 billion in October following a decrease of £0.3bn in September. Meanwhile, mortgage lending went up by 1.1%.
Nicky Stevenson, managing director at national estate agent group Fine & Country, thought seasonal factors may have influenced the rise in house prices, with many movers focusing on a Christmas deadline.
She said: “November saw a notable rise in house prices, potentially marking the last flurry of activity before the traditional Christmas lull in the property market.
“This uptick in demand — shown by rising prices both monthly and annually — could be motivated by a combination of factors, including the desire to settle into new homes before the festive season begins.”
She added: “Looking ahead, it will be interesting to see if this demand continues into the winter months or if the market takes its usual seasonal breather. But this year’s dynamics could challenge that trend.
“For now, the demand remains high, buoyed by those determined to beat the clock on both tax reforms and seasonal constraints.
“However, rising inflation and living costs could prompt some buyers to pause plans and focus on savings. While activity is strong now, the true test of the market’s resilience will come in the new year.”
