UK House Prices See Fastest Rise in Two Years Amid Market Resilience

• House prices increased by 3.7% year-on-year in November, the highest growth in two years.
• Typical UK home now costs £268,144, nearing the record high of £273,751 from August 2022.
• Mortgage approvals are at their highest level since August 2022, suggesting strong buyer demand.
• Upcoming changes to stamp duty in April 2025 are expected to drive a short-term surge in house sales.
• Nationwide attributes resilience to low unemployment and wage growth outpacing inflation.

UK house prices recorded their fastest annual growth in two years last month, rising by 3.7% compared to November 2023, according to Nationwide's latest survey. Despite stretched affordability, the housing market remains robust, with property values approaching record highs.

The average cost of a UK home reached £268,144 in November, a 1.2% increase from October, marking the largest monthly rise since March 2022. Nationwide’s Chief Economist, Robert Gardner, attributes the market's resilience to factors such as low unemployment and wage growth outstripping inflation, bolstering buyer confidence.

Data from the Bank of England also reveals mortgage approvals are at their highest since August 2022, further indicating strong demand. However, upcoming changes to stamp duty in April 2025 are expected to affect market activity.

Currently, homebuyers in England and Northern Ireland pay no stamp duty on properties up to £250,000 (£425,000 for first-time buyers). These thresholds will drop to £125,000 and £300,000, respectively, next April. Nationwide predicts a surge in house sales in early 2025 as buyers aim to secure properties before the new rules take effect, followed by a likely slowdown.

While affordability challenges persist, Mr Gardner expects the market to strengthen gradually as lower interest rates and rising wages improve spending power.

Tom Church comments, “Rising house prices can be daunting for first-time buyers, but it’s essential to stay informed about market trends and act strategically, especially with the upcoming stamp duty changes. Consider speaking to a mortgage advisor to explore your best options."