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 show strong annual growth

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

Halifax reported a 4.8% annual increase in house prices, while Nationwide’s index showed an increase of 3.7% on the same period.

On a monthly basis, Halifax said prices were up by 1.3% on October 2024, while Nationwide’s index showed a 1.2% increase.

Amanda Bryden, Head of Mortgages at Halifax, said their data showed the strongest annual increase since November 2022.

She said: ‘Latest figures continue to show improving levels of demand for mortgages, as an easing in mortgage rates boosts 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.

‘As we move towards the end of the year and into 2025, positive employment figures and anticipated decreases in interest rates are expected to continue supporting demand. This should underpin further house price growth, albeit at a modest pace as borrowing costs remain above the average of a few years ago.’

Nationwide’s Chief Economist, Robert Gardner said the acceleration in house price growth in November was surprising since affordability remains stretched by historic standards, though said it was unlikely to have been driven by upcoming stamp duty changes as the data reflects mortgage applications commenced prior to the Budget.

He said: ‘Gauging the underlying strength of the market will be more difficult in the coming months as the upcoming stamp duty changes will provide an incentive for buyers to bring forward house purchases to avoid paying additional tax.

‘This is likely to lead to a jump in transactions in the first three months of 2025 (especially in March) and a corresponding 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 in the near term and impact price movements. 

‘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 UK HPI, with the latest data for October 2024, showed a 3.4% increase in house prices compared with October 2023, and a 0.2% increase on September 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 and the North West saw the greatest annual increases in 3Q2024, while East Anglia was the only region to show an annual decrease in the same period.

^{Source: Nationwide}

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