- Buyers seeking to beat April stamp duty deadline have inflated prices
The typical home increased in value by around £12,000 last year, according to Nationwide Building Society.
It said the average house price rose by 4.7 per cent over the course of 2024, increasing from £257,443 to £269,426.
However, Nationwide says prices remain just below the all-time high recorded in summer 2022, before mortgage rates spiked.
Prices have risen consecutively for the past four months. December saw a 0.7 per cent per cent monthly rise, after taking account of seasonal effects, following a 1.2 per cent increase in November.
The recent spike in prices is linked to buyers trying to beat the stamp duty changes taking effect from 1 April this year.
Recovering: 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
These changes will increase the costs of buying for both first-time buyers and home movers.
The price at which stamp duty starts to be charged will revert back to £300,000 for first-time buyers, from its current level of £425,000.
For first-time buyers, it would mean that instead of paying no stamp duty on a purchase worth £425,000, they will pay £6,205.
Home movers currently pay stamp duty if their home costs more than £250,000, but from 1 April, this will drop back to £125,000 – the level it was at before temporary changes were made in the 2022 mini-Budget.
Nicky Stevenson, managing director at national estate agent group Fine & Country said: ‘December continued to defy expectations, with house prices continuing to rise despite the usual seasonal slowdown.
‘This reflects strong demand as buyers moved quickly to secure deals ahead of the April 2025 stamp duty threshold changes, driving growth both monthly and annually.’
Where did house prices rise most in 2024?
Northern regions continue to see higher price growth than southern regions.
Northern Ireland is the best performing area for second year running, according to Nationwide, with prices up 7.1 per cent over 2024.
The North of England was the best performing English region, with prices up 5.9 per cent year-on-year.
Meanwhile, East Anglia was the weakest performing region, with prices up just 0.5 per cent over the past year.
North-south divide: Northern regions have seen higher price growth than southern regions
Will house prices rise in 2025?
Nationwide is forecasting house prices to rise by between 2 and 4 per cent this year.
It says the upcoming changes to stamp duty are likely to generate volatility, as buyers bring forward their purchases to avoid the additional tax.
This will lead to a jump in transactions in the first three months of 2025 and a corresponding period of weakness in the following three to six months, as occurred in the wake of previous stamp duty changes.
‘As 2025 unfolds, the urgency of pre-April transactions may ease, potentially leading to a more balanced market,’ added Stevenson.
‘If demand slows due to fewer buyers actively making purchases, sellers may feel pressure to lower prices or offer more favorable terms to attract buyers.
‘This creates opportunities for those still in the market, as they might find it easier to negotiate better deals, potentially making 2025 a “buyer’s market”.
Buying agent, Jonathan Hopper of Garrington Property Finders is also expecting a strong start to the year.
‘Many who held off in 2024 now have both the will and the way to move, and this is likely to get the market out of the blocks strongly in the coming weeks,’ said Hopper.
‘Money flows where attention goes, and this is why price rises have been sharpest in the most affordable parts of the UK and among first-time buyers.
‘Meanwhile, the abundant number of homes for sale is providing plenty of choice for buyers while also keeping price growth in check.
‘While many buyers remain highly price-sensitive, steadily improving sentiment will encourage more people to press ahead with their moving plans before prices rise further.’