House prices rose by 3.3% in 2024, taking the average UK property price tag to £297,166 after summer mortgage rate reductions and income growth boosted market activity in the latter part of the year.
Changes to stamp duty thresholds that take effect from 1 April – and will see the price at which buyers begin paying the land tax lowered – have also given prospective first-time buyers greater motivation to bring home buying plans forward, according to Halifax.
The combination of positive factors meant that mortgage demand picked up, hitting the highest level in over two years and returning to levels seen pre-pandemic.
The bank’s House Price Index for December recorded a slight monthly decline of 0.2% in house prices following five consecutive monthly increases in values.
Annual growth in December was down month-on-month from 4.7% to 3.3%.
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Growth varies across the country
Northern Ireland – where property prices grew by 7.4% annually in December, taking the average house price to £205,895 – maintained the UK’s strongest annual pace of growth in 2024.
In Wales, house prices were up 4.6% compared to the previous year, with properties now costing an average of £226,646. Meanwhile, in Scotland, house price rises were the lowest in the UK, with prices 2.4% higher than in 2023 – taking the average house price to £209,959.
In England, house prices in the North West were up 5.3% compared to the previous year, with properties now costing an average of £238,832 – the strongest growth of any English region.
London retains the highest average house price in the UK, at £547,614 – up 3.3% compared to 2023.
Modest price growth anticipated
Amanda Bryden, head of mortgages at Halifax, said house prices had also been buoyed by demand outstripping supply in many areas of the country. She added that the situation is “possibly further amplified by homeowners holding off putting their property on the market, perhaps in anticipation of mortgage rates reducing further”.
Looking ahead to the prospects for this year’s market activity, Bryden said: “While the housing market has been supported in recent months by falling mortgage rates, income growth and the announcement on upcoming stamp duty policy changes, mortgage affordability will remain a challenge for many, especially as the bank rate is likely to come down more slowly than previously predicted.
“However, providing employment conditions don’t deteriorate markedly from a more recent softening, buyer demand should hold up relatively well and, taking all this into account, we’re continuing to anticipate modest house price growth this year.”
The Bank of England base rate was held at 4.75% when the Monetary Policy Committee (MPC) last met in December.
Jeremy Leaf, North London estate agent and a former Royal Institution of Chartered Surveyors (RICS) residential chair, said: “Although reflecting their customer mortgage offers before the Budget at the end of October, these always-reliable figures confirm what we have been seeing on the ground – in other words, buyers are taking advantage of the improved choice of property and negotiating hard, which is resulting in some prices softening.
“Looking forward, nervousness remains as the full impact of the Chancellor’s decisions affect activity and the improved interest from first-time buyers to take advantage of disappearing beneficial stamp duty rates gradually eases out of the figures.”
