Average house prices increased by 4.7% annually to £269,426 in December, a house price index has shown.
The figures from Nationwide revealed the annual increase in house prices was larger than the 3.7% rise recorded in the year to November, when values averaged £268,144.
On a monthly basis, house prices were 0.7% higher than the previous month, which was a smaller growth than the 1.2% rise seen from October to November.
Robert Gardner, Nationwide’s chief economist, said: “UK 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.
“House prices increased by 0.7% month-on-month, after taking account of seasonal effects, following a 1.2% rise in November.”
How to support young landlords
Sponsored by BM Solutions
Growth across all regions
Nationwide’s data for Q4 showed that house prices rose across all regions in the three-month period.
Northern Ireland was shown to be the best performing area for the second year in a row, with house prices up 7.1% annually to £197,696. Meanwhile, Scotland saw a 4.4% increase to £187,016, and Wales reported a 2.7% rise to £207,187.
In England, house prices rose by 3.1% year-on-year to £305,399.
Nationwide said there was a “clear North-South divide in house price performance”, as values in Northern England outpaced those in Southern regions.
The North was the best performing region, with a 5.9% annual increase in house prices to £164,696, while East Anglia was the weakest, with a rise of 0.5% to an average of £272,152.
Terraced homes see strong rises
The average value of a terraced home rose by 4.4% annually, while flats saw a recovery in prices with a 4% rise. Semi-detached homes increased by 3.4% annually and detached homes by 3.2%.
Gardner said: “If we look over the longer term, detached homes have continued to have a slight edge over other property types, most likely due to the ‘race for space’ seen during the pandemic.
“Indeed, since Q1 2020, the price of an average detached property increased by nearly 27%, while flats have only risen by c.15% over the same period.”
Volatility in the housing market?
Looking forward, Gardner said changes to stamp duty would probably create volatility as buyers bring purchases forward to avoid the additional tax.
He said: “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.”
He said as long as the economy continues to recover steadily as expected, the pace of housing market activity would “continue to strengthen gradually as affordability constraints ease through a combination of modestly lower interest rates and earnings outpacing house price growth”.
“The latter is likely to return to the 2-4% range in 2025 once stamp duty related volatility subsides,” Gardner added.
