Positive employment figures and easing mortgage rates helped boosted house prices in November, according to two of Britain’s biggest lenders, despite affordability remaining a challenge for buyers.
Average house prices rose by 1.3% in November to reach are cord high of £298,083, Halifax’s latest House Price Index found. Prices were up 4.8% year-on-year, the bank said, the strongest level of growth for two years. Nationwide’s November House Price Index similarly reported the fastest annual growth rate for two years, claiming that prices are now just 1% below their all-time peak.
Amanda Bryden, head of mortgages at Halifax, said: “Latest figures continue to show improving levels of demand for mortgages, as an easing in mortgage rates boost buyer confidence. However, despite these positive trends, many potential buyers and movers still face significant affordability challenges and buyer confidence may be tested against a changeable economic backdrop.”
Nationwide said that recent strong price growth was unlikely to have been due to lower stamp duty rates ending next April, since the majority of mortgage applications commenced before the Budget announcement.
Robert Gardner, Nationwide’s chief economist, said: “Solid labour market conditions, with low levels of unemployment and strong income gains, even after taking account of inflation, have helped underpin the steady rise in activity and house prices since the start of the year. Household balance sheets are also in good shape with debt levels at their lowest levels relative to household income since the mid-2000s”
Outlook for 2025
Both lenders said they expected house prices to remain on an upward trajectory next year, although growth is likely to be slower due to mortgage costs remaining relatively high.
According to Nationwide, the first few months of the year is likely to be particularly strong for activity, as buyers race to complete purchases before the stamp duty changes come into effect in April.
We can expect a jump in transactions in the first three months of next year (especially in March), followed by a 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 which could affect property prices in the short term.
