As house prices continue to rise for the fourth consecutive month, homeowners are seeing steady growth in their property value, marking an encouraging trend for those navigating a complex housing market. Experts highlight how these changes may influence housing transactions and affordability in the coming months.
Nationwide : House Prices Rise Despite Affordability Challenges
According to data from Nationwide, the average price of a home in the UK climbed by 4.7% per year, reaching £269,426 at the end of 2024. Increased market activity and buyer and seller tenacity have been credited with the increase, which translates into a £12,663 increase in property values. Prices increased 0.7% in December alone over the previous month, indicating continued market demand.
Robert Gardner, Nationwide’s chief economist, remarked on the unexpected strength of the housing market amid affordability pressures: “Mortgage market activity and house prices proved surprisingly resilient in 2024 given the ongoing affordability challenges facing potential buyers.” He also noted that mortgage approvals had surpassed pre-pandemic levels by the end of the year, signalling robust demand.
This trend is anticipated to create a surge in transactions during the first quarter of 2025, particularly as buyers and sellers respond to upcoming changes in stamp duty regulations. However, some experts caution that these adjustments may distort the market and lead to temporary fluctuations in activity.
Opportunities and Challenges for Buyers and Sellers
Nathan Emerson, CEO of Propertymark, pointed out potential benefits for those entering the market in 2025. “A slower-paced market after the initial rush may create opportunities for greater negotiation on prices,” he said. This slower market could provide flexibility for both buyers and sellers, encouraging transactions that better reflect market conditions.
Affordability remains a critical factor, with incomes expected to grow faster than inflation for the second consecutive year. According to Nationwide, this could encourage individuals who had postponed moving to revisit their plans, contributing further to market stability.
However, experts warn that the upcoming stamp duty changes could lead to short-term market distortions. While there may be a brief spike in activity before the changes take effect, the long-term impact on overall transactions is expected to be minimal, especially as the potential savings for most buyers remain modest.
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