Halifax predicts ‘modest’ house price growth in 2025 after December dip
High mortgage rates will remain a challenge for borrowers in 2025, Halifax has claimed.
It comes as the lender’s latest House Price Index for December 2024 recorded a 0.2% monthly fall in average property values and suggested annual growth slowed to 3.3% from 4.7% in November.
The monthly decline was the first since March 2024.
The index puts the typical property price at £297,166.
Northern Ireland maintains the strongest property price growth of any nation or region in the UK, rising by 7.4% annually in December. Properties in Northern Ireland now cost an average of £205,895.
House prices in Wales were up 4.6% compared with 2023, with properties now costing an average of £226,646.
Scotland saw a lower rise in house prices compared to the rest of the UK, with properties in the country now £209,959, up 2.4% annually.
In England, house prices in the North West were up 5.3% compared to the previous year, with properties now costing an average £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 with 2023.
Amanda Bryden, head of mortgages at Halifax, 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.”
Commenting on the index, Tom Bill, head of UK residential research at Knight Frank, said: “The current rate of house price growth will come under more pressure as higher borrowing costs triggered by the Budget start to bite.
“A number of buyers are still sitting on sub-4% mortgage offers made before October, which has supported demand in recent months. Activity has also been temporarily boosted ahead of April’s stamp duty increase but a recent dip in mortgage approvals is a sign that cracks from the Budget are starting to show. We recently revised down our UK house price forecast for 2025 to 2.5% to reflect the tougher lending landscape and the fact economic growth is struggling to gain momentum.”
Nathan Emerson, chief executive of Propertymark, was more upbeat.
He said: “Our member agents recently reported that the overall number of properties achieving their asking prices has nearly doubled from 6% to 11% showing a real desire and confidence from prospective and current homeowners to approach the buying and selling process.
“As people start to feel more settled within their financial position, and with an expected rush as many people across England and Northern Ireland provision themselves to navigate Stamp Duty rises from April, we expect to see an upbeat and confident start to the year.”
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