For the first time since March 2024, UK house prices declined in December 2024. According to Halifax, the average house price dropped by 0.2% from November’s figure, reaching £297,166. This marked a slowdown after five consecutive monthly increases.
Regional Variations in House Price Growth
While Northern Ireland recorded the strongest annual house price growth in the UK at 7.4%, Wales saw an increase of 4.6%. In contrast, Scotland experienced lower annual growth at 2.4%.
- Northern Ireland: The average house price rose to £205,895, up by 7.4% year-over-year.
- Wales: House prices in Wales increased by 4.6%, reaching an average of £226,646.
- Scotland: Annual growth was lower than the rest of the UK at 2.4%, with an average house price of £209,959.
London Remains the Most Expensive Region
Despite the national decline, London maintained its position as the most expensive region in the UK, with an average house price of £547,614. This represents a 3.3% year-over-year increase.
Impact of Stamp Duty Changes
Amanda Bryden from Halifax highlighted that changes to stamp duty from April will give first-time buyers more motivation to purchase properties and bring their home-buying plans forward. However, only 8% of homes in London are expected to be free from stamp-duty for first-time buyers.
Projections for 2025
Bryden predicted that mortgage affordability would remain a challenge for many, especially with the anticipated slower decrease in interest rates. Despite this, she expects modest house price growth in 2025, provided employment conditions do not deteriorate further.
- Mortgage Affordability: Bryden emphasized that mortgage affordability will continue to be a challenge, particularly as interest rates are expected to decrease more slowly than previously predicted.
- House Price Growth: She anticipates modest house price growth in 2025, taking into account the factors mentioned above.
Expert Opinions
Other experts share varying views on the housing market’s future:
- Matt Thompson from Chestertons noted that December 2024 was one of the busiest Decembers in years, driven by first-time buyers and second-steppers seeking to upsize.
- Ashley Webb from Capital Economics suggested that recent rises in mortgage rates may have started to affect the housing market more than expected. Despite this, he still expects house prices to rise by 3.5% in 2025.
Separate figures from Nationwide show a different picture: house prices rose more than expected in December and at the fastest annual rate since October 2022.
Conclusion
The UK’s housing market remains complex, with various factors influencing its trajectory. While house prices declined in December 2024 for the first time since March, regional variations and expert opinions suggest that growth may resume in the coming months.