UK house prices rise at fastest pace in two years

Posted by Admin December 2, 2024 Bussiness

House prices rose at the fastest pace in two years, ahead of a stamp duty increase coming into force next year.

Property values climbed by 3.7% in the year to November to £268,144, according to the Nationwide house price index. This marks the fastest rise since November 2022 when there was a 4.4% rise.

In the month of November alone, house prices rose 1.2% compared to October, the largest monthly increase since March 2022. House prices are now just 1% below their all-time high recorded in the summer of 2022.

Nationwide said recent changes to stamp duty would probably bring purchases forward early next year as buyers seek to avoid paying extra tax.

“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,” said Nationwide chief economist Robert Gardner.

“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.”

In her maiden autumn statement, chancellor Rachel Reeves announced that second-home buyers will face a stamp duty rate rise of two percentage points – from 3% to 5%.

From April 2025, a first-time buyer purchasing a property valued at £425,000 will incur a stamp duty charge of £6,250.

Jeremy Leaf, north London estate agent: “In our offices we are seeing prices hardening and stock levels rising, partly because the budget, though not particularly helpful, was not as bad as many feared either.

Nathan Emerson, chief executive of estate agent group Propertymark, said: “It’s likely that as both the confidence and affordability of buyers increase due to the easing of inflation, this has spurred on activity in the market and as a result, we are starting to see health restored in the form of steady house price growth.

“What we are likely to witness now is a further spike in activity especially for buyers in England and Northern Ireland as some rush to complete before the upcoming Stamp Duty rises due to commence from April 2025.”