The latest Nationwide House Price Index shows that UK house prices were up 4.7% compared with December 2023, with prices remaining below the record highs of summer 2022.
Prices were up 3.1% across England compared with Q4 2024. Northern England outperformed southern England, with prices up 4.9% year on year, making it the best performing region in the country.
There was a 2.2% year-on-year rise in Southern England, with South West seeing the best performance at 2.7%. East Angia saw the smallest increase at 0.5% year-on-year.
Following a 1.2% rise in November, house prices increased by 0.7% month on month, which also took season affects into account.
Nationwide’s chief economist Robert Gardner said: “Mortgage market activity and house prices proved surprisingly resilient in 2024 given the ongoing affordability challenges facing potential buyers. At the start of the year, house prices remained high relative to average earnings, which meant that the deposit hurdle remained high for prospective first-time buyers.
“This is a challenge that had been made worse by record rates of rental growth in recent years, which has hampered the ability of many in the private rented sector to save.”
He added: “Moreover, for many of those with sufficient savings for a deposit, meeting monthly payments was a stretch because borrowing costs remained well above those prevailing in the aftermath of the pandemic. For example, a typical mortgage rate for someone with a 25% deposit hovered around 4.5% for much of the year, three times the 1.5% prevailing in late 2021, before the Bank of England started to raise the Bank Rate.
“As a result, 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.”
Commenting on the latest data from Nationwide April Mortgages director Rachael Hunnisett said: “Closing 2024 with another month of house price growth is a positive note for the industry, marking a year of resilience and recovery.
“The previous set of house price figures from Nationwide showed the fastest rate of growth in two years, so this latest data highlights just how robust the market is.
“The outlook for early 2025 looks promising, with activity expected to rise as homeowners rush to complete transactions ahead of April’s stamp duty deadline. An increase in property listings could also foster more competitive pricing, offering buyers greater flexibility.
She added: “Recent interest rate cuts have significantly boosted buyer confidence, playing a key role in the recovery of house prices throughout 2024. If inflation remains stable and rates continue to fall, the housing market could see even more momentum in the coming months.”