A SIMPLE chart has revealed how much house prices changed in 2024, according to Halifax.
The nation’s biggest mortgage lender said that UK house prices ended 2024 with a 3.3% annual increase.
The average house price has now risen to £297,166, compared to £287,535 at this time last year.
This positive yearly growth follows a slight dip of 0.2% in December, breaking a streak of five consecutive monthly increases.
The housing market saw steady performance in the early part of 2024, with growth picking up pace from the summer onwards.
This acceleration was driven by falling mortgage rates, rising incomes, and upcoming changes to stamp duty thresholds, which encouraged first-time buyers.
Mortgage demand surged to its highest level in over two years, reaching pre-pandemic levels.
Amanda Bryden, head of mortgages at Halifax, said: “Prices fell back slightly in December, by 0.2%, following five consecutive monthly increases.
“The housing market was broadly steady at the start of 2024, with house price growth taking off from the summer onwards.
“In the latter half of the year, house prices grew in response to the falls in mortgage rates, alongside income growth, both leading to financial pressures somewhat easing for buyers.”
Strong demand often outstripped the available supply, further boosting prices in many areas.
Some homeowners may have also delayed putting their properties on the market, anticipating further drops in mortgage rates.
STAMP duty relief available to first-time buyers since 2022 will end in April 2025.
As a result, a first-time buyer purchasing a property valued at £425,000 will incur a stamp duty charge of £6,250.
Stamp duty is one of the additional upfront costs that purchasers may incur when buying a property.
Currently, first-time buyers are exempt from paying stamp duty on properties priced up to £425,000.
If a property is more expensive, they only pay tax at 5% on the portion above £425,000 and up to £625,000.
The lower limit for first-time buyer stamp duty exemption was temporarily increased back in 2022 from £300,000 to £450,000.
The maximum value of a property on which first-time buyers’ relief also rose from £500,000 to £625,000.
Similarly, the threshold at which all other buyers begin to pay stamp duty was raised from £125,000 to £250,000.
These thresholds were set to revert to their previous levels in April 2025 unless the government decided to extend them.
Unfortunately, the Treasury has confirmed that the current thresholds will revert to their original levels in the spring.
It’s a huge blow for all home buyers and means they have just months left to get a sale across the line before the thresholds at which stamp duty becomes payable fall.
Regionally, Northern Ireland maintained the strongest annual house price growth at 7.4%, with average prices reaching £205,895.
Wales saw a healthy 4.6% annual increase, bringing average prices to £226,646.
Scotland experienced more modest growth of 2.4%, with average prices now at £209,959.
In England, the North West saw the strongest growth at 5.3%, with average prices reaching £238,832.
London, meanwhile, retained its position as the most expensive area, with the highest average house price in the UK at £547,614, representing a 3.3% annual increase.
It’s difficult to predict what will happen to house prices in 2025 as there are so many factors involved.
Halifax’s Amanda Bryden offered her insight.
While recent months have seen support from falling mortgage rates, income growth, and upcoming stamp duty changes, affordability remains a key concern, particularly with the Bank of England‘s base rate’s projected slow decline.
However, Bryden suggests that if employment conditions hold relatively steady, buyer demand should remain reasonably robust, leading to modest house price growth in 2025.
Building Society Nationwide has said it expects to see a greater demand in the first three months of next year as buyers look to secure a home before the stamp duty hike.
Alice Haine, personal finance analyst at Bestinvest, added: “The decision not to extend the current relief on stamp duty is likely to lead to an uptick in house prices over the next three months as buyers race to secure a deal before the deadline to avoid a bigger tax bill.
“Prices may be more muted from April, though the prospect of further interest rate cuts may support the market if affordability levels continue to improve.”
Meanwhile, Zoopla has said it expects property values to increase by 2.5% on average during 2025, based on certain assumptions around mortgage rates.
House prices in the Midlands, Northern England, Scotland and Wales are likely to outperform the UK average next year, the property website said.
Meanwhile, home prices in southern England, where property affordability pressures are more acute, will lag behind, according to the forecast.
Rightmove expects asking prices to increase by 4% across 2025, but it cautioned that the market remains price-sensitive, and seller competition is at its highest level for a decade.
IF you're looking for a traditional type of mortgage, getting the best rates depends entirely on what's available at any given time.
There are several ways to land the best deal.
Usually the larger the deposit you have the lower the rate you can get.
If you’re remortgaging and your loan-to-value ratio (LTV) has changed, you’ll get access to better rates than before.
Your LTV will go down if your outstanding mortgage is lower and/or your home’s value is higher.
A change to your credit score or a better salary could also help you access better rates.
And if you’re nearing the end of a fixed deal soon it’s worth looking for new deals now.
You can lock in current deals sometimes up to six months before your current deal ends.
Leaving a fixed deal early will usually come with an early exit fee, so you want to avoid this extra cost.
But depending on the cost and how much you could save by switching versus sticking, it could be worth paying to leave the deal – but compare the costs first.
To find the best deal use a mortgage comparison tool to see what’s available.
You can also go to a mortgage broker who can compare a much larger range of deals for you.
Some will charge an extra fee but there are plenty who give advice for free and get paid only on commission from the lender.
You’ll also need to factor in fees for the mortgage, though some have no fees at all.
You can add the fee – sometimes more than £1,000 – to the cost of the mortgage, but be aware that means you’ll pay interest on it and so will cost more in the long term.
You can use a mortgage calculator to see how much you could borrow.
Remember you’ll have to pass the lender’s strict eligibility criteria too, which will include affordability checks and looking at your credit file.
You may also need to provide documents such as utility bills, proof of benefits, your last three month’s payslips, passports and bank statements.
