Analysis of movement in house price indices

Each month, Halifax, Nationwide and HM Land Registry publish house price indices, tracking the movement in average house prices in the UK. Halifax and Nationwide updates are based on mortgage approvals data, while the UK HPI is a joint production by HM Land Registry, Land and Property Services Northern Ireland, ONS and Registers of Scotland.

House price indices end year with strong annual growth

Annual movement in UK house prices was up in December 2024, according to both Halifax and Nationwide’s indices.

Halifax reported a 3.3% annual increase in house prices, while Nationwide’s index showed an increase of 4.7% on the same period.

Dr David Crosthwaite, Chief Economist at BCIS, said: ‘Following a period of subdued growth, we are starting to see pent-up demand and slightly lower borrowing costs feeding through to house prices.

‘Interestingly the largest increases are being seen in northern counties of the UK. The stamp duty changes in April are likely to drive further growth in prices at the beginning of the year.’

On a monthly basis, Halifax said prices were down by 0.2% on November 2024, while Nationwide’s index showed a 0.7% increase.

Amanda Bryden, Head of Mortgages at Halifax, said house price growth took off from the summer onwards as financial pressures eased for buyers.

On expectations for 2025, she said: ‘While the housing market has been supported in recent months by falling mortgage rates, income growth and the announcement on upcoming Stamp Duty policy changes, mortgage affordability will remain a challenge for many, especially as Bank Rate is likely to come down more slowly than previously predicted.

‘However, providing employment conditions don’t deteriorate markedly from a more recent softening, buyer demand should hold up relatively well and, taking all this into account, we’re continuing to anticipate modest house price growth this year.’

Nationwide’s Chief Economist, Robert Gardner said it will be difficult to discern the underlying strength of the market in 2025 due to upcoming changes to stamp duty, which are likely to generate volatility.

He said: ‘This will lead to a jump in transactions in the first three months and a corresponding period of weakness in the following three to six months, as occurred in the wake of previous stamp duty changes.

‘But, providing the economy continues to recover steadily, as we expect, the underlying pace of housing market activity is likely to continue to strengthen gradually as affordability constraints ease through a combination of modestly lower interest rates and earnings outpacing house price growth. The latter is likely to return to the 2-4% range in 2025 once stamp duty related volatility subsides.’

The UK HPI, with the latest data for November 2024, showed a 3.3% increase in house prices compared with November 2023, and a 0.4% decrease on October 2024. As the UK HPI figures cover house sales that may have been agreed months previously, there tends to be a lag in the data. 

^{Source: Halifax (Methodology), Nationwide (Methodology), UK HPI (Methodology)}

Regional data from Nationwide shows Northern Ireland, the North and the North West saw the greatest annual increases in 4Q2024, while East Anglia showed an annual increase of just 0.5% in the same period.

^{Source: Nationwide}

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