UK house price growth slows to 3.3% from 2024, says Halifax | House prices

Annual growth in UK house prices slowed last month, with experts warning that mortgage affordability could counter some demand from house hunters in the year ahead.

Data released by Halifax, Britain’s biggest mortgage lender, showed the price of the average house rose 3.3% in December compared to the same period a year earlier – down from at an annual rate of 4.7% in November.

On a monthly basis, the slowdown was more pronounced, with prices falling for the first time in six months, falling 0.2% from November.

House prices accelerated in the second half of 2024 due to a fall in mortgage rates, rising wages and a slowdown in price inflation, which put less pressure on consumer finances.

“In many parts of the country, house prices have also been supported by demand outstripping supply, perhaps further amplified by homeowners being reluctant to put their property on the market – perhaps anticipating a further fall in mortgage rates,” Amanda Bryden, head of mortgages at Halifax, said.

The government’s plans to raise the stamp duty threshold in England and Northern Ireland from March – which has been temporarily lowered since 2022 – have also boosted demand, giving potential first home buyers extra motivation to rush onto the housing ladder, Halifax said.

Together, these factors led to a recovery in mortgage applications and home loan demand returned to pre-pandemic levels to reach its highest level in more than two years.

However, Halifax warned that affordability could end up hampering house price growth in the coming months.

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“Where does this leave the real estate market for 2025?” Although the property market has been supported in recent months by falling mortgage rates, growing incomes and news of upcoming changes to stamp duty policy, mortgage affordability will remain a challenge for many, especially since the discount rate should fall more slowly than before. predicted,” Bryden said.

“However, provided employment conditions do not deteriorate materially following a more recent downturn, buyer demand should hold up relatively well and, taking all of this into account, we continue to anticipate modest price growth real estate this year.”