Homeowners across Britain could see their property values surge by more than £10,000 next year, according to new forecasts from Nationwide Building Society.
The country’s biggest mutual predicts average house prices will grow between two and four per cent in 2025.
For the typical UK home, this could mean an increase of up to £10,725 based on current average values.
The forecast comes as the housing market shows signs of resilience, despite ongoing affordability challenges that have impacted buyers throughout 2024.
Based on Nationwide’s latest data, the average UK property is currently valued at £268,144.
A four per cent rise would add £10,725 to the typical home’s value by the end of 2025.
Based on Nationwide’s latest data, the average UK property is currently valued at £268,144
PA
Even under the more conservative estimate of two per cent growth, homeowners could still see their property value increase by £5,363.
This forecast follows a strong end to 2024, with November seeing the largest monthly price gain in two and a half years.
Market experts are anticipating significant volatility in early 2025 due to upcoming stamp duty changes.
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Robert Gardner, chief economist at Nationwide, said: “Upcoming changes to stamp duty are likely to generate volatility, as buyers bring forward their purchases to avoid the additional tax.”
From April 1, 2025, the stamp duty threshold for home movers will drop from £250,000 to £125,000.
First-time buyers will also see changes, with their tax-free threshold reducing from £425,000 to £300,000.
Gardner predicts a surge in transactions during the first quarter of 2025, particularly in March, followed by “a corresponding period of weakness in the following three to six months”.
The housing market has shown remarkable strength in recent months, with November marking a significant milestone.
Property values rose by 1.2 per cent in November alone, representing the largest monthly increase since March 2022.
On an annual basis, house prices have climbed 3.7 per cent, marking the strongest yearly growth in two years.
This performance comes despite the challenges faced by potential buyers, including high deposit requirements and elevated borrowing costs.
Mortgage rates have remained notably higher than pre-pandemic levels, with typical rates for those with a 25 per cent deposit hovering around 4.5 per cent through much of 2024.
Looking ahead, Nationwide remains optimistic about the market’s underlying strength. Gardner notes that providing the economy continues its steady recovery, housing market activity should strengthen gradually.
This improvement is expected to come through a combination of modestly lower interest rates and earnings growth outpacing house price increases.
