UK house prices rose again in December as property market activity continued to improve, mortgage lender Nationwide said on Thursday.
House prices increased by an average of 0.7% month-on-month in December, following a 1.2% jump in November, the latest data revealed.
House prices ended the year 4.7% higher than their level of December 2023, up from 3.7% in November – the highest annual growth rate since late 2022.
“Mortgage market activity and house prices proved surprisingly resilient in 2024 given the ongoing affordability challenges facing potential buyers,” said Robert Gardner, chief economist at Nationwide.
The building society stuck to its view that house prices were likely to rise in 2025 by 2% to 4% – with activity likely to be stronger in the first half of the year ahead of an increase in property transaction taxes in April.
Property industry reactions:
Jeremy Leaf, north London estate agent, said: “Prices have been stronger for cheaper properties and areas but overall more choice has prompted a better balance between supply and not just demand but increasingly proceed-able demand.
“Boxing Day was a good example – a much lower proportion than usual of nosy neighbours as buyers and sellers come to terms with the new normal; interest rates unlikely to fall quickly any time soon whereas wage rises are still exceeding inflation.
“We expect this pattern of sales progressing slowly to exchange with little or no renegotiation or fall through to continue with first-time buyers desperately trying to take advantage of the stamp duty concession before the beginning of April.”
Matt Thompson, head of sales at Chestertons, said: “December 2024 was one of the busiest Decembers in years in terms of buyer demand. This was driven by first-time buyers who were keen to get on the property ladder before this year’s changes to Stamp Duty but also by second-steppers, including young families wanting to upsize.
“Despite the uplift in buyer enquiries, rapid price increases are unlikely this year but improved affordability, pent-up demand and renewed confidence in the market should provide support for steady growth in property values. As such, we predict property prices to rise by 3.4% across the UK and 3% in London this year.”
Nathan Emerson, CEO of Propertymark, commented: “With a degree of uncertainty still looming regarding borrowing rates and affordability, alongside rises to Stamp Duty for buyers in England and Northern Ireland commencing from April 2025, many people are extremely keen to move sooner rather than later, defying the usual winter lull normally seen this time of year.
“However, once the dust has settled following the anticipated rush heading towards April, buyers and sellers may reap the rewards of a slower-paced market which may allow opportunities for greater negotiation on price from both buyers and sellers.”
Jonathan Hopper, CEO of Garrington Property Finders, said: “So much for the traditional Christmas cooldown in the property market. With both prices and activity levels rising in December, the market ended 2024 strongly and this momentum is carrying into 2025.
“Two factors combined to keep estate agents busy last month, at a time when househunters often pause their search to start afresh in the New Year.
“The first is the gathering ‘Stamp Duty stampede’ as many first-time buyers race to complete their purchases before the stamp duty thresholds change at the end of March.
“The second is that while mortgage interest rates barely budged in December, the realisation that cheaper mortgages are on their way is spurring some would-be buyers into action.
“Many who held off in 2024 now have both the will and the way to move, and this is likely to get the market out of the blocks strongly in the coming weeks.
“Money flows where attention goes, and this is why price rises have been sharpest in the most affordable parts of the UK and among first-time buyers.
“Meanwhile, the abundant number of homes for sale is providing plenty of choice for buyers while also keeping price growth in check.
“March’s Stamp Duty deadline will provide a strong but short-term distortion at the lower end of the market, but the benefits of cheaper mortgages will be enjoyed more widely and gradually.
“While many buyers remain highly price-sensitive, steadily improving sentiment will encourage more people to press ahead with their moving plans before prices rise further.”
Iain McKenzie, CEO of The Guild of Property Professionals, commented: “The end of 2024 has looked very different to how the year started, with many forecasts predicting that house prices would be in negative territory. However, the market showed resilience despite headwinds such as political uncertainty, and house prices have edged up.
“The first quarter of 2025 should see an increase in market activity, as many potential buyers would want to try get their transaction over the line before the Stamp Duty changes come into play at the start of April. The increase in demand should underpin house prices during the first quarter.
“While this year is starting on a more positive foot than 2024, it will be interesting to see whether the Stamp Duty changes do dampen the market to some degree. Aspects such as further anticipated rate cuts should mitigate the impact, along with the economy’s continued recovery and earnings growth.”
Nicky Stevenson, managing director at Fine & Country, added: “As 2025 begins, the housing market is entering another pivotal year, balancing tax changes with broader economic trends shaping buyer activity.
“December continued to defy expectations, with house prices continuing to rise despite the usual seasonal slowdown. This reflects strong demand as buyers moved quickly to secure deals ahead of the April 2025 stamp duty threshold changes, driving growth both monthly and annually.
“Indicators show the market ended 2024 on a high note, with house price indices underscoring its resilience. While regional differences are notable — with some areas seeing price increases of over 17% (£33,000) and others experiencing smaller declines — the overall picture remains robust and dynamic.
“As 2025 unfolds, the urgency of pre-April transactions may ease, potentially leading to a more balanced market. 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 favorable 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’.
“With tax reforms coming into effect and economic pressures persisting, regional disparities may deepen, and the pace of price growth could moderate slightly.
“Long-term demand for housing remains strong, supported by enduring consumer needs. While price growth may slow slightly, this creates space for buyers to explore options, take their time, and make informed decisions.
“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.”