UK home costs rose by 4.7% in 2024, says Nationwide

UK home costs ended 2024 some 4.7% larger than initially of the yr, in response to the Nationwide.

Property costs and housing market exercise remained “remarkably resilient” regardless of affordability challenges dealing with consumers, the lender mentioned.

The common dwelling within the UK value £269,426 on the finish of December, its figures present.

Regardless of the most recent rise, the common value stays under the height seen in the summertime of 2022.

The Nationwide, the UK’s greatest constructing society, mentioned costs of terraced houses rose quickest throughout the yr.

Northern Eire noticed the quickest worth progress, its mortgage knowledge exhibits, with values additionally rising sooner in northern England than within the south, though all areas noticed a rise.

A scarcity of certainty over curiosity and mortgage charges, in addition to upheaval brought on by modifications to stamp obligation, might make 2025 troublesome to navigate for consumers and sellers.

Housing consultants predict the market will see the variety of gross sales enhance over the following few months, forward of the stamp obligation modifications scheduled for April, earlier than falling away afterwards.

Home consumers will begin paying stamp obligation on properties over £125,000, as an alternative of over £250,000 for the time being.

First-time consumers at the moment pay no stamp obligation on houses as much as £425,000, however this may drop to £300,000 in April.

There are additionally widespread expectations that the Financial institution of England will progressively cut back rates of interest all year long, probably beginning in February, giving confidence to lenders to chop the price of new mounted mortgage offers.

Nevertheless, Financial institution of England governor Andrew Bailey lately mentioned “the world is just too unsure” to make correct predictions of when rates of interest would fall, and by how a lot.

Robert Gardner, Nationwide’s chief economist, mentioned that home costs remained excessive relative to common earnings initially of 2024, which meant that elevating a deposit was powerful for potential first-time consumers.

“This can be a problem that had been made worse by file charges of rental progress in recent times, which has hampered the flexibility of many within the non-public rented sector to save lots of,” he mentioned.

And Holly Tomlinson, monetary planner at funding agency Quilter, mentioned: “The looming modifications to stamp obligation are prone to make buying much more troublesome for this first-time consumers, including additional prices at a time when each penny counts.”

Some lenders have predicted that falling mortgage charges and rising wages ought to enhance housing affordability throughout this yr.

UK Finance, the lenders’ commerce physique, has forecast a ten% rise in mortgage lending for home purchases throughout 2025, though some analysts have already questioned this prediction as optimistic for lenders.

Additional forward, it’s anticipated many individuals will once more discover it powerful to afford to maneuver or purchase a brand new dwelling in 2026.

Eight in 10 mortgage clients have fixed-rate offers. The rate of interest on this sort of mortgage doesn’t change till the deal expires, normally after two or 5 years, and a brand new one is chosen to interchange it.

Even when mortgage charges fall this yr, charges will nonetheless stay larger than many owners are paying on the present mounted deal.

The Financial institution of England estimated that about 4.4 million mortgage holders are anticipated to see funds rise by 2027.

It mentioned a typical owner-occupier coming off a set price within the subsequent two years would see their month-to-month mortgage repayments enhance by round £146.

Nationwide’s home worth knowledge relies by itself mortgage lending, which doesn’t embody consumers who buy houses with money, or buy-to-let offers. Money consumers account for a couple of third of housing gross sales.

Rival lender, the Halifax, will publish its last 2024 knowledge within the coming days.