Average house owner might see their home worth rise by £10,725 in 2025, says Nationwide

Homeowners could see the value of their property rise by more than £10,000 on average next year, according to a new forecast by Nationwide Building Society.

Britain’s biggest mutual has predicted that average house prices will grow by between 2 per cent and 4 per cent in 2025.

In cash terms, the average property is currently worth £268,144, based on Nationwide’s data.

A 4 per cent rise would see £10,725 added to the price of the typical home. 

Meanwhile, the more conservative 2 per cent estimate would see it rise £5,363.  

The forecast comes after house prices saw their biggest monthly rise for two and a half years in November.

Going up: Nationwide is forecasting house prices will rise by between 2% to 4% in 2025. Prices have increased 3.7% over the last 12 months

The value of the average home rose by 1.2 per cent last month, according to Nationwide – the largest monthly gain since March 2022.

On a year-on-year basis, house prices were up 3.7 per cent – the biggest annual rise in two years. 

Stamp duty deadline could boost housing market

Robert Gardner, chief economist at Nationwide is expecting a strong start to 2025 as buyers rush to beat the stamp duty deadline, followed by lull in the immediate aftermath. 

Home movers currently pay stamp duty if their home costs more than £250,000, but from 1 April 2025 this will drop back to £125,000 – the level it was at before temporary changes were made in the 2022 mini Budget. 

A first-time buyer purchasing a property up to the value of £425,000 currently pays no stamp duty. However, this limit is due to drop back to the old threshold of £300,000.

This means the same £425,000 purchase will be subject to a £6,205 tax bill from 1 April.

‘Upcoming changes to stamp duty are likely to generate volatility, as buyers bring forward their purchases to avoid the additional tax,’ said Gardner. 

‘This will lead to a jump in transactions in the first three months of 2025 – especially in March – and a corresponding period of weakness in the following three to six months, as occurred in the wake of previous stamp duty changes. 

‘This will make it more difficult to discern the underlying strength of the market.’

Aside from the stamp duty impact, Gardner is expecting similar house price growth to what has been recorded this year. 

He added: ‘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, where the latter is likely to remain broadly in the 2-4 per cent range in 2025.’

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