UK house prices soar 4.7% to near record high, says Nationwide

2 January 2025, 15:47

UK house prices increased for the fourth month in a row in December, sitting just below an all-time high according to Nationwide Building Society.

House prices ended the year on a "strong footing" Nationwide said, as the cost of an average house increased to £269,426.

The building society's monthly tracker showed that house prices increased by 4.7% annually in December, a 0.7% rise from the previous month.

Robert Gardner, Nationwide's chief economist, said that while house prices ended the year on a strong footing, they did not meet the all time high of £273,751 recorded in August 2022.

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He said: "UK house prices ended 2024 on a strong footing, up 4.7% compared with December 2023, though prices were still just below the all-time high recorded in summer 2022."

"It was encouraging that activity levels in the housing market increased over the course of 2024 with the number of mortgages approved for house purchase each month rising above pre-pandemic levels towards the end of the year."

The average UK homeowner experienced a 12% increase in value over the last year from £257,443 at the end of 2023 to £269,426 at the end of last year.

Looking ahead, Mr Gardner said stamp duty changes from April "are likely to generate volatility, as buyers bring forward their purchases to avoid the additional tax".

A temporary "nil rate" threshold for first-time buyers will shrink back to £300,000, from £425,000 currently. Stamp duty applies in England and Northern Ireland.

Mr Gardner predicted the changes will lead to a jump in transactions in the first three months of 2025, particularly in March, and a period of weakness in the following three to six months.

Nationwide also found a "clear north-south divide" among typical house prices in England. Homes in Northern England saw a yearly increase of 4.9%, while the typical house price in southern England increased by 2.2%

Nathan Emerson, CEO of Propertymark said: “With a degree of uncertainty still looming regarding borrowing rates and affordability, alongside rises to Stamp Duty for buyers in England and Northern Ireland commencing from April 2025, many people are extremely keen to move sooner rather than later, defying the usual winter lull normally seen this time of year.

“However, once the dust has settled following the anticipated rush heading towards April, buyers and sellers may reap the rewards of a slower-paced market which may allow opportunities for greater negotiation on price from both buyers and sellers.”

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Here are average house prices followed by annual house price increases in the fourth quarter of December, according to Nationwide Building Society:

Northern Ireland, £197,696, 7.1%

North East, £164,696, 5.9%

North West, £218,012, 5.5%

West Midlands, £245,173, 4.7%

East Midlands, £235,877, 4.4%

Yorkshire and Humber, £207,373, 4.4%

Scotland, £187,016, 4.4%

South West, £306,730, 2.7%

Wales, £207,187, 2.7%

Outer Metropolitan (includes St Albans, Stevenage, Watford, Luton, Maidstone, Reading, Rochford, Rushmoor, Sevenoaks, Slough, Southend-on-Sea, Elmbridge, Epsom and Ewell, Guildford, Mole Valley, Reigate & Banstead, Runnymede, Spelthorne, Waverley, Woking, Tunbridge Wells, Windsor and Maidenhead, Wokingham), £422,372, 2.4%

Outer South East (includes Ashford, Basingstoke and Deane, Bedford, Braintree, Brighton and Hove, Canterbury, Colchester, Dover, Hastings, Lewes, Fareham, Isle of Wight, Maldon, Milton Keynes, New Forest, Oxford, Portsmouth, Southampton, Swale, Tendring, Thanet, Uttlesford, Winchester, Worthing), £336,224, 2.3%

London, £525,535, 2.0%

East Anglia, £272,152, 0.5%