House Prices Rose by 4.7% in 2024, Says Nationwide

Regional Growth Trends

Northern Regions Lead the Way
Nationwide’s data reveals that Northern Ireland experienced the fastest price growth in 2024. Northern England also outpaced southern regions in terms of house value increases.

Terraced Homes on the Rise
Terraced properties saw the highest price growth among property types, reflecting strong demand in urban areas.

Challenges and Changes in 2025

Stamp Duty Revisions and Market Impacts
Major changes to stamp duty in April 2025 are expected to influence the housing market:

New Thresholds: Stamp duty will apply to properties over £125,000 (currently £250,000).
First-Time Buyers: The duty-free threshold for first-time buyers will drop from £425,000 to £300,000.

Interest Rates Outlook
Expectations of interest rate cuts by the Bank of England could ease affordability pressures. However, uncertainty remains, as Bank of England Governor Andrew Bailey recently emphasized the difficulty of predicting rate movements.

Affordability Challenges

Struggles for First-Time Buyers
Rising house prices and record rental growth have made saving for deposits increasingly difficult:

Nationwide’s Perspective: Chief economist Robert Gardner noted that high property prices relative to earnings pose significant barriers.
Expert Insight: Financial planner Holly Tomlinson highlighted that impending stamp duty changes may further challenge first-time buyers.

Future Market Predictions

Housing Market Outlook for 2025 and Beyond
Despite the resilience seen in 2024, the housing market faces both opportunities and challenges in the coming years:

Mortgage Lending Trends
UK Finance predicts a 10% rise in mortgage lending for house purchases in 2025, but analysts are skeptical about this forecast given ongoing affordability issues.

Fixed-Rate Mortgages and Rising Payments

Fixed-Rate Dominance: Eight in ten mortgage holders have fixed-rate deals, shielding them from immediate rate fluctuations.
Future Increases: The Bank of England estimates that 4.4 million mortgage holders will see payment hikes by 2027, with typical repayments rising by around £146 monthly.

Longer-Term Affordability
While falling mortgage rates and rising wages may improve affordability for some, fixed-rate expiration will challenge many homeowners as they face higher rates than their current deals.

Cash Buyers and Nationwide Data

Nationwide’s figures are based solely on its mortgage lending data, excluding cash buyers, who account for approximately one-third of transactions. Rival lender Halifax is expected to release its 2024 data soon, offering further insights.

Conclusion

A Resilient Yet Challenging Market
The UK housing market showed remarkable resilience in 2024, with prices rising 4.7%. However, affordability pressures and upcoming changes in stamp duty and interest rates will test the market in 2025. Regional disparities and shifts in buyer behavior will likely shape the landscape for years to come.