UK house prices rose 3.3% in the 12 months to November, according to the Land Registry index.
The average house price was £290,000 in November, which is £10,000 higher than a year ago. While property prices grew last year, they dipped by 0.4% between October and November 2024.
Darrell Walker, director of sales and distribution at ModaMortgages, a buy-to-let lender, said: “Remembering the uncertainty that gripped the market heading into the Autumn Budget, the 0.4% month-on-month fall in house prices between October and November last year is not surprising.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Get 6 issues free
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
“However, importantly, the annual increase remains strong at 3.3%, which is a clear sign of the housing market’s resilience in the face of the economic and political challenges that homebuyers and investors had to navigate for much of 2024.”
Jason Tebb, president of OnTheMarket, a property portal, said that two interest rate cuts in the second half of last year “have had a positive knock-on effect on confidence, which the market relies so heavily on". He added: "With inflation dipping slightly to 2.5%, it is heading back in the right direction albeit slowly, but if this trend continues it will ease pressure on the Bank of England to delay further rate reductions.”
The Land Registry house price index is an official data source calculated by the Office for National Statistics, covering mortgaged properties and those bought with cash.
However, it lags other indices like those provided by Nationwide, Halifax and Zoopla. For example, the others have already published data for the whole of 2024 - Nationwide says house prices increased by 4.7% last year.
We take a closer look at the Land Registry index, which regions and types of property saw the strongest growth, and ask whether house prices will continue to rise this year.
House price growth by region
Average house prices in the 12 months to November 2024 increased by 3% in England to reach £306,000.
Wales saw the same uplift of 3%, giving an average property price of £219,000. In Scotland, the annual inflation was higher at 4.7% (£195,000).
The Northern Ireland data is calculated by Land & Property Services Northern Ireland; it showed that the average house price increased by 6.2% in the year to Q3 2024 (July to September) to reach £191,000.
In terms of English regions, annual house price inflation was highest in the North East, where prices rose by 5.9% in the 12 months to November. This was followed by the North West and Yorkshire and The Humber (both 5.7%).
London had the lowest annual inflation, where prices dropped by 0.1%. The capital was the only English region with negative annual inflation.
The second lowest annual growth was recorded in the South East, where prices rose 1.4%.
Find out which towns saw house prices grow the most in 2024, according to Zoopla.
House price growth by property type
Unsurprisingly, detached houses cost the most in the UK, with an average price of £436,949. Flats and maisonettes are the cheapest, at £233,230.
In terms of the strongest growth over the 12 months to 2024, the Land Registry says it was terraced houses that performed the best. Average prices for a terraced property rose 4.7% from £231,796 to £242,598.
The average price for semi-detached homes grew by 4.3%, flats and maisonettes rose by 2.1% and detached properties increased by 1.5%.
The Land Registry data also shows a breakdown in the prices paid by first-time buyers and those who have already owned a home. First-time buyers in Great Britain paid an average price of £244,519 in November while former owner occupiers paid £332,626.
What’s the outlook for house prices in 2025?
The outlook for house prices depends a lot on mortgage rates, which are influenced by swap rates.
The turmoil in the gilt market over the past week has caused swap rates to rise, and some lenders have increased their fixed mortgage rates.
“Affordability remains a challenge with a number of lenders raising rates in recent days on the back of higher swap rates but there has not been significant repricing,” commented Tebb at OnTheMarket.
Jonathan Samuels, CEO of Octane Capital, a property finance firm, added: “The outlook remains somewhat uncertain and we simply haven’t seen interest rates fall as swiftly as expected over the last six months.
“In fact, mortgage rates remain higher than they were this time last year and so those looking to purchase are best advised to tread with a degree of caution and avoid the temptation to over-borrow in hopes of beating the stamp duty deadline.”
Experts believe the upcoming change in stamp duty thresholds will cause a flurry of housing market activity, which could result in higher prices over the next few months.
The tax-free stamp duty threshold will revert from £250,000 to £125,000 on 1 April, potentially adding thousands of pounds to the cost of moving house. For first-time buyers, the threshold will fall from £425,000 to £300,000.
Mark Harris, chief executive of mortgage broker SPF Private Clients, says: “With stamp duty concessions ending in March, this could focus minds in the early months of the year, resulting in a busier spring market as buyers accelerate purchases.”
Once the deadline has passed, experts predict we could see a housing market correction, with reduced transaction numbers and weaker rates of house price growth.
The rest of the year will likely be influenced by what happens to mortgage rates, whether the government announces any measures that could boost or stifle the market, and other economic data like inflation and wage growth.
Will “Liberation Day” strike again?
Israel claims victory in the '12-day war' with Iran
