House prices fell slightly in December, according to latest figures from Halifax.
The 0.2 per cent fall last month marks the first dip since June, with one of Britain’s biggest lenders having previously recorded five months of consecutive growth.
It means house prices finished last year 3.3 per cent up, with the typical home worth £297,166. In total, house prices rose by just under £10,000 in 2024.
Amanda Bryden, head of mortgages at Halifax, said: ‘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.’
Moving higher: House prices finished 2024 up 3.3% over the year, with the average house price £297,166
She adds: ‘In many areas across the country, house prices were also buoyed by demand outstripping supply, possibly further amplified by homeowners holding off putting their property on the market – perhaps in anticipation of mortgage rates reducing further.’
Where are prices rising the most and least?
Prices in Northern Ireland continue to rise more than anywhere else in the UK – the average home is up by 7.4 per cent annually.
House prices in Wales were up 4.6 per cent 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, up 2.4 per cent more than the year before.
In England, house prices in the North West were up 5.3 per cent 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 per cent compared to last year.
What next for house prices in 2025?
Halifax has forecast modest house price growth of between 0 per cent and 3 per cent in 2025, along with a further small increase in the number of transactions.
‘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,’ added Amanda Bryden.
Anthony Codling, head of European housing and building materials for investment bank RBC Capital Markets is expecting prices to rise in 2025.
‘The fall in December ended a run of five consecutive monthly increases, but with wages expected to rise and mortgage rates to reduce in 2025 we expect house prices to rise in 2025.
‘The stamp duty stampede is likely to underpin prices in the first three months of the year, before the house price baton will be passed onto mortgage rates.
‘There remains uncertainty around the broader macroeconomic outlook, but demand for homes continues to outstrip supply and our love affair with homeownership has not been dented by rising costs of living, higher for longer mortgage rates or the Budget.’
Christmas dip: Prices fell back slightly in December, down 0.2 per cent, following five consecutive monthly increases
Buying agent Jonathan Hopper, chief executive of Garrington Property Finders says that he is already witnessing fierce competition among first-time buyers as they attempt to beat the stamp duty changes.
However, he says it is a different market for those trying to sell to upsizers and downsizers.
‘Higher up the market, things are proving tougher for sellers. A surge in the number of homes for sale has given buyers an abundance of choice, and with it the leverage to drive a hard bargain.
‘In response, many sellers are having to hold down their asking prices or risk having their home sit unsold on the shelf.
‘At the same time, most wealthy buyers remain highly price sensitive. With plenty of prime property to choose from, many are prioritising value, taking their time and negotiating hard – all of which is keeping price growth in check.’
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