UK Nationwide House Price Growth Tops Expectations

RTTNews | 2 days ago

(RTTNews) - UK house prices posted a faster-than-expected growth and ended 2024 on a strong footing, the Nationwide Building Society said Thursday.

House prices grew 4.7 percent year-on-year in December, faster than the 3.7 percent increase in November and also came in stronger than economists' forecast of 3.8 percent gain. At the same time, on a monthly basis, house price inflation softened to 0.7 percent from 1.2 percent in November. Prices were expected to climb only 0.1 percent.

Property prices averaged GBP 269,426 in December.

House prices were still just below the all-time high recorded in summer 2022, Nationwide's Chief Economist Robert Gardner said.

"… it was encouraging that activity levels in the housing market increased over the course of 2024 with the number of mortgages approved for house purchase each month rising above pre-pandemic levels towards the end of the year," Gardner said. The economist noted that upcoming changes to stamp duty are likely to generate volatility as buyers bring forward their purchases to avoid the additional tax.

Gardner said the underlying pace of housing market activity is likely to continue to strengthen gradually as affordability constraints ease through a combination of modestly lower interest rates and earnings outpacing house price growth.

The latter is set to return to the 2-4 percent range in 2025 once stamp duty related volatility subsides, Gardner added.

In 2024, the Bank of England had reduced its benchmark rate by 50 basis points. The first reduction was in August, followed by another reduction in November.

Tags: GBP

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