CashNews.co
The price of a typical UK home rose by 3.7% year on year in November, a strong rebound from the 2.4% recorded the previous month and marking the fastest rate of annual growth for two years (November 2022).
This is according to the latest figures from the Nationwide House Price Index which also reveals that house prices increased by 1.2% month on month. After taking account of seasonal effects, this was the largest monthly gain since March 2022. House prices are just 1% below the all-time high recorded in the summer of 2022.
Commenting on the figures, Nationwide’s chief economist Robert Gardner said: “The acceleration in house price growth is surprising, since affordability remains stretched by historic standards, with house prices still high relative to average incomes and interest rates well above pre-Covid levels.
He added: “The pickup in price growth is unlikely to have been driven by upcoming stamp duty changes, since the majority of mortgage applications commenced before the Budget announcement.
“Housing market activity has remained relatively resilient in recent months, with the number of mortgage approvals approaching the levels seen pre-pandemic, despite the higher interest rate environment.”
Gardner said gauging the underlying strength of the market will be more difficult in the coming months as the upcoming stamp duty changes will provide an incentive for buyers to bring forward house purchases to avoid paying additional tax.
“This is likely to lead to a jump in transactions in the first three months of 2025 (especially in March) and a corresponding period of weakness in the following three to six months, as occurred in the wake of previous stamp duty changes. This has the potential to shift the demand/supply balance in the near term and impact price movements.”
Fine & Country estate agency managing director Nicky Stevenson commented: “Looking ahead, it will be interesting to see if this demand continues into the winter months or if the market takes its usual seasonal breather. But this year’s dynamics could challenge that trend. For now, the demand remains high, buoyed by those determined to beat the clock on both tax reforms and seasonal constraints.
“However, rising inflation and living costs could prompt some buyers to pause plans and focus on savings. While activity is strong now, the true test of the market’s resilience will come in the new year.”
MT Finance director Tomer Aboody said: “Another month of house price growth further indicates the level of confidence in the market which has been evident since the reduction and stability in both mortgage rates and inflation. Both sellers and buyers are pushing to transact, as affordability is improving.
He added: “While the Budget is now behind us, its full impact has yet to be felt. However, we are hopeful that this confidence in the market continues, with further rate cuts expected in the new year.”