- House prices went up 3.7% in the 12 months to November
House prices saw their biggest monthly rise for two and a half years in November, according to new figures.
The value of the average home rose by a bumper 1.2 per cent last month, according to the latest figures from Nationwide Building Society. This was the largest monthly gain since March 2022.
On a year-on-year basis, house prices were up 3.7 per cent – the biggest annual rise in two years.
Nationwide says that prices are now just 1 per cent below the all-time peak recorded in summer 2022 before interest rates began heading upwards.
In cash terms, the average property is now worth £268,144.
Near-record highs: The average house price is just 1% below its all-time peak says Nationwide
Nationwide uses seasonal adjustment to smooth out months that are typically more and less active in the housing market.
On a non-seasonally adjusted basis, house prices rose by 0.9 per cent between October and November.
Robert Gardner, Nationwide’s chief economist, said the rise was down to improvements in household finances.
‘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.’
However, he added that buying a home or moving was still a challenge for many.
‘Affordability remains stretched by historic standards, with house prices still high relative to average incomes and interest rates well above pre-Covid levels,’ Gardner said.
Will stamp duty rise impact house prices?
Looking ahead, experts think that house prices will continue to rise given the impending stamp duty deadline, which could encourage buyers to try and complete before April 2025, as well as the potential for lower mortgage rates.
Home movers currently pay stamp duty if their home costs more than £250,000, but in March 2025 this will drop back to £125,000 – the level it was at before temporary changes were made in the 2022 mini-Budget.
A first-time buyer purchasing a property up to the value of £425,000 currently pays no stamp duty. However, this limit is due to drop back to the old threshold of £300,000.
This means the same £425,000 purchase will be subject to a £6,205 tax bill from 1 April.
Jonathan Hopper, chief executive of Garrington Property Finders said: ‘We’re seeing the first signs of another “stamp duty stampede” as many first-time buyers race to complete their purchases before the stamp duty thresholds change at the end of March.
‘And even though many mortgage lenders have yet to pass on the latest base rate cut to new borrowers, some would-be buyers are being spurred into action by the realisation that cheaper mortgages are on their way.’
Nicky Stevenson, managing director at estate agent group Fine & Country added: ‘First-time buyers now pay no stamp duty on homes up to £425,000, but this will drop to £300,000. These changes are driving urgency among buyers keen to complete transactions before costs rise.’
Stevenson also thinks rising inflation and living costs could prompt some buyers to pause their plans and focus on savings.
‘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.’
‘While activity is strong now, the true test of the market’s resilience will come in the new year,’ she added.