UK house prices rose nearly five per cent in 2024, new figures show, as the housing market’s recovery from a challenging few years picked up the pace.
Nationwide’s house price index showed that house prices rose 4.7 per cent over the year-to-December. Across 2023, house prices fell 1.8 per cent, according to the building society.
However, in the month of December, prices rose only 0.7 per cent, which was a slower pace than 1.2 per cent recorded in November. This meant that the average property was worth £269,426 at the end of the year, still slightly below the all-time high in summer 2022.
All regions of the UK saw prices climb in 2024, although London was the second worst-performing region in the country, with prices rising two per cent.
Northern England and the midlands comfortably outperformed southern England, with average prices climbing 4.9 per cent compared to 2.2 per cent in the south.
Northern Ireland came top for the second year running, recording house price inflation of 7.1 per cent, while house prices in Scotland rose 4.4 per cent over the year.
“Mortgage market activity and house prices proved surprisingly resilient in 2024 given the ongoing affordability challenges facing potential buyers,” Robert Gardner, chief economist at Nationwide said.
Gardner pointed out that prices were very high relative to average earnings, while rental growth has made it more difficult for households to save for a deposit.
The Bank of England’s interest rate hikes have also seen typical monthly mortgage payments triple compared to late 2021, raising affordability concerns for some households.
Still, he said it was “encouraging” that activity in the market had increased over the 2024, pointing out that the number of mortgage approvals had climbed above pre-pandemic levels.
The housing market has received some support from rising real wages and the hope of future interest rate cuts.
Looking into 2025, April’s changes to stamp duty will prompt a flurry of activity early in the year. This will then subside in the following months, making it more difficult to discern the strength of the market.
“Providing the economy continues to recover steadily, as we expect, the underlying pace of housing market activity is likely to continue to strengthen gradually as affordability constraints ease through a combination of modestly lower interest rates and earnings outpacing house price growth,” Gardner said.
