According to the Nationwide, UK house prices concluded 2024 approximately 4.7% above their January levels.
The lender stated that property prices and housing market activity showed “notable resilience” even with the affordability issues confronting buyers.
According to its figures, the average house in the UK was valued at £269,426 at the close of December.
Even with the recent increase, the average price is still lower than the high recorded in the summer of 2022.
The Nationwide, the largest building society in the UK, reported that the prices of terraced houses increased the most over the year.
Northern Ireland experienced the quickest price growth, according to its mortgage data, with values also increasing more rapidly in northern England compared to the south, though all areas experienced a rise.
Changes in 2025
Uncertainty surrounding interest and mortgage rates, along with disruptions from alterations to stamp duty, may render 2025 challenging for both buyers and sellers.
Real estate specialists anticipate that the sales volume will rise in the coming months due to the stamp duty adjustments set for April, followed by a decline afterwards.
Home purchasers in England and Northern Ireland will begin to incur stamp duty on properties priced above £125,000, whereas currently, it applies to those over £250,000.
First-time buyers presently pay no stamp duty on properties valued up to £425,000, but this threshold will reduce to £300,000 in April.
There are broad expectations that the Bank of England will slowly lower interest rates over the year, potentially beginning in February, encouraging lenders to lower the costs of new fixed mortgage agreements.
Nevertheless, Bank of England governor Andrew Bailey recently mentioned that “the world is too uncertain” to accurately predict when interest rates will decline and by what margin.
Robert Gardner, the chief economist at Nationwide, mentioned that at the beginning of 2024, house prices were still elevated in comparison to average salaries, making it difficult for potential first-time buyers to save for a deposit.
“This challenge has been exacerbated by unprecedented rental growth in recent years, which has hindered many in the private rented sector from saving,” he stated.
Holly Tomlinson, a financial planner at Quilter, commented: “Upcoming changes to stamp duty will probably complicate buying for first-time purchasers, increasing expenses when saving money is crucial.”
Interest rates outlook
Several lenders anticipate that decreasing mortgage rates and increasing wages will enhance housing affordability throughout this year.
UK Finance, the trade association for lenders, has predicted a 10% increase in mortgage lending for home purchases in 2025, though several analysts have already challenged this forecast as overly optimistic for lenders.
Looking ahead, many individuals are anticipated to struggle once more with the affordability of relocating or purchasing a new home in 2026.
Eight out of ten mortgage borrowers have fixed-rate agreements. The interest rate for this type of mortgage remains unchanged until the agreement ends, typically after two or five years, when a new one is selected to take its place.
Even if mortgage rates decline this year, they will still be higher than what many homeowners currently pay on their fixed agreements.
The Bank of England projected that approximately 4.4 million mortgage borrowers are anticipated to experience payment increases by 2027.
It indicated that an average homebuyer exiting a fixed-rate mortgage in the upcoming two years would experience a rise in their monthly repayments of approximately £146.
Nationwide’s house price information is derived from its mortgage lending practices, excluding cash buyers and buy-to-let transactions. Cash purchasers represent approximately one-third of home sales.
Competing lender, the Halifax, will release its final 2024 figures in the upcoming days.
