
House prices in the UK rose at their quickest annual rate in two years this November, according to Nationwide’s latest survey. The building society revealed a 3.7% increase in the price of a typical UK home compared to the same month in 2022, bringing property values close to record highs. The average home now costs £268,144, just shy of the £273,751 peak recorded in August 2022.
Nationwide attributed the unexpected surge to a resilient housing market, with mortgage approvals nearing pre-pandemic levels. House prices also climbed 1.2% between October and November, marking the largest monthly increase since March 2022.
Economic Conditions Support Growth
Nationwide’s Chief Economist, Robert Gardner, pointed to low unemployment and pay rises outpacing inflation as key factors supporting the housing market.
“Affordability remains stretched by historic standards, yet the market has proven resilient,” Gardner said.
Recent data from the Bank of England highlighted that November’s mortgage approval numbers were the highest since August 2022.
Stamp Duty Changes and Market Impact
In October’s Budget, Chancellor Rachel Reeves announced that reduced stamp duty rates in England and Northern Ireland would end in April 2025. Currently, buyers pay stamp duty on properties over £250,000, but the threshold will revert to £125,000.
First-time buyers, who currently avoid stamp duty on homes priced up to £425,000, will see this limit reduced to £300,000.
Nationwide expects the impending changes to spark a surge in property transactions in early 2025, as buyers aim to secure deals before the deadline. This increase in activity will likely be followed by a slowdown.
Outlook for the Market
Looking ahead, Gardner predicted gradual market strengthening as consumer spending power improves, driven by lower interest rates and rising incomes.
“While the stamp duty changes may influence short-term activity, broader economic conditions will play a more significant role in shaping the housing market’s trajectory,” he said.
With property values holding steady near record highs, the UK housing market continues to defy expectations, despite ongoing affordability challenges.