0:01 AM, 3rd December 2024, About 19 hours ago
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UK house prices saw a surprising rebound in November, with annual growth accelerating to 3.7%, Nationwide reports.
This marks the fastest pace of annual growth in two years, surpassing the previous month’s 2.4%.
Month-on-month, prices increased by 1.2%, the largest monthly gain since March 2022.
The average house price is now £268,144 – just 1% below their all-time peak.
Robert Gardner, Nationwide’s chief economist, said: “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.
“The pickup in price growth is unlikely to have been driven by upcoming stamp duty changes, since the majority of mortgage applications commenced before the Budget announcement.”
He adds: “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.”
Nathan Emerson, the chief executive of 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.”
Matt Thompson, the head of sales at Chestertons, said: “November’s property market saw an increasing number of first-time buyers who were and still are motivated to purchase a property before the stamp duty changes in April 2025.
“This, in addition to high demand from house hunters in general, led to more sales being finalised than in November of last year.”
Jeremy Leaf, a north London estate agent and a former RICS residential chairman, said: “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.
“As a result, some pent-up demand was released, and buyers are digging a little deeper. That extra choice, as well as broad acceptance that inflation and mortgage rates will not reduce as far and as fast as many expected, has meant caution still prevails.
“Transaction lengths are extending too, particularly bearing in mind the seasonal distractions so sellers still need to be extra competitive to attract serious attention at this time of year.”
Tom Bill, the head of UK residential research at Knight Frank, said: “A feeling the Budget could have been worse, the prospect of a stamp duty rise next April and the dwindling availability of sub-4% mortgages have all driven activity over the last two months.
“The main risk facing the UK housing market now is whether Labour’s Budget will work in the long term.
“Any extended period of upwards pressure on unemployment, inflation and borrowing costs would put downwards pressure on house prices and transaction volumes, and we have revised down our forecasts marginally for the next three years.”
