House prices fell back slightly over the festive period following five months of steady growth.
The latest figures released by Halifax this morning have shown that the price of a typical home in the UK dipped by 0.2% in December.
Annually, according to the data, property prices are up +3.3% (vs +4.7% last month) with the price of an average home ending the year at £297,166.
National and regional breakdown
Northern Ireland retain its position at the top with the strongest property price growth of any nation or region in the UK. December saw it rising by +7.4% on an annual basis. Properties in Northern Ireland now cost an average of £205,895.
House prices in Wales were up +4.6% compared to the previous year, with properties now costing an average of £226,646.
Scotland saw a lower rise in house prices compared to the rest of the UK, with properties in the country now £209,959, +2.4% more than the year before.
In England, house prices in the North West were up +5.3% compared to the previous year, with properties now costing an average £238,832 – the strongest growth of any English region.
London retains the highest average house price in the UK, at £547,614, up +3.3% compared to last year.
Amanda Bryden, Head of Mortgages, Halifax, said: “UK house prices finished 2024 up +3.3% over the year, with the average house price £297,166. Prices fell back slightly in December, by -0.2%, following five consecutive monthly increases.
“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.
“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.”
Tom Bill, head of UK residential research at Knight Frank, said: “The current rate of house price growth will come under more pressure as higher borrowing costs triggered by the Budget start to bite. A number of buyers are still sitting on sub-4% mortgage offers made before October, which has supported demand in recent months.
"Activity has also been temporarily boosted ahead of April’s stamp duty increase but a recent dip in mortgage approvals is a sign that cracks from the Budget are starting to show. We recently revised down our UK house price forecast for 2025 to 2.5% to reflect the tougher lending landscape and the fact economic growth is struggling to gain momentum.”
Director of Benham and Reeves, Marc von Grundherr, commented: “A marginal monthly decline in the rate of house price growth during December highlights the usual seasonal lull caused by the festive break. However, a strong annual rate of growth demonstrates a market that has very much found its form during the latter stages of 2024, following a period of prolonged economic turbulence largely driven by a spike in interest rates.
"Of course, affordability remains a sizable obstacle for today’s buyers, but the market resilience seen throughout 2024 has provided a very strong foundation for 2025 and it’s widely predicted that house prices are only going to go one way and that’s up.”
CEO of Yopa, Verona Frankish, commented: “December saw a first monthly decline in house prices following five consecutive months of positive growth, albeit a very slight drop, but this is certainly no cause for concern given the seasonality at play, with the market finishing the year in a far stronger position on an annual basis.
"In fact, a pause for breath was probably required ahead of what is set to be a very busy first quarter, as the stamp duty countdown continues with relief thresholds set to increase as of 1st April this year.
"As a result, we can expect house prices to continue to climb, with 2025 predicted to bring another year of upward growth.”
Nathan Emerson, CEO of Propertymark comments: “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."