‘Upward growth’ expected for house prices in 2025
Although data from Halifax’s House Price Index shows house prices fell last month, experts remain positive they will climb this year.
This morning new data from Halifax’s House Price Index was published which reveals that house prices fell by 0.2% between November and December 2024. The news comes after prices increased for five consecutive months.
As a result, annually property prices are now up by 3.3% from the year before as opposed to when they had increased by 4.7% in November. Currently, the average cost of a home now stands at £297,166.
Looking into this more closely, Northern Ireland maintains the strongest property price growth of any nation or region in the UK, rising by 7.4% on an annual basis in December.
Meanwhile, in England house prices have increased in the Northwest by 5.3% with properties now averaging at £209,959 – an increase of 2.4% from 2023.
Against this backdrop, the research also outlines London retains the highest average house price in the UK at £547,614 – up from 3.3% from the previous year.
‘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,’ said Amanda Bryden, head of mortgages at Halifax. ‘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.’
Amanda continued: ‘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.’
Looking at the bigger picture, Amanda also remarked how these changes will affect the housing market going into 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,’ she said.
‘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.’
Echoing a similar tone, Marc von Grundherr, director of Benham and Reeves, has also explained that the future of the housing market looks bright for the new year.
‘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,’ Marc explained.
‘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.’
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