UK house prices have experienced significant growth, with the average price of a property rising by 1.2% in November. This marks the fastest rise in two years, with an annual price growth rate of 3.7%. Across the UK, the average house price in November was £268,144, just 1% below an all-time high. Nationwide attributes this growth to solid labour market conditions, low levels of unemployment, and wage growth. The surprising jump in house prices has been driven by market activity and valuations that have been steadily rising throughout the year.
Following the Autumn Statement, Chancellor Rachel Reeves announced that second-home buyers will face a stamp duty rate rise from 3% to 5%. Additionally, stamp duty thresholds will fall next spring, with a first-time buyer purchasing a property valued at £425,000 incurring a stamp duty charge of £6,250 from April 2025. This has accelerated demand as homebuyers rush to secure deals before the changes take effect. Nationwide anticipates a jump in the housing market activity in the first three months of next year, driven by buyers aiming to avoid increased tax bills.
The housing market’s resilience is evident in the figures published, with affordability levels becoming a concern as prices head towards their peak while mortgage rates remain relatively high. The Bank of England’s rate cut in November has been accompanied by warnings that around 4.4 million households could see increases in mortgage repayments over the next three years, with some facing significant monthly hikes. For existing borrowers looking to refinance, securing a new deal before reverting to a lender’s Standard Variable Rate will be crucial in avoiding higher costs. The decision on whether to opt for a fixed or variable rate mortgage can be complex, underlining the importance of seeking advice from an independent mortgage broker.
Getting the best mortgage deal depends on various factors such as deposit size, changes in loan-to-value ratio, credit score, and salary. Shopping around for deals before your current deal ends can help secure the best rates. Early exit fees may apply if switching deals before the current one ends, so comparing costs is essential. Mortgage comparison tools and independent mortgage brokers can help assess a range of deals, considering fees that may be involved. Lenders also have strict eligibility criteria that involve affordability checks, credit file assessment, and documentation submission. Looking ahead, affordability concerns may impact sales and prices as the property ladder becomes more challenging to access.
Various organizations track house prices in the UK, including Halifax, Nationwide, and the Office for National Statistics (ONS). Halifax and Nationwide release monthly indices based on mortgage data, while the ONS utilizes Land Registry data for accurate sold prices. Rightmove and Zoopla also provide monthly house price data based on asking prices and sold prices. The latest data from these indices show an increase in UK house prices, with the average price reaching new highs and annual growth rates on the rise. As the housing market continues to evolve, staying informed about price trends and seeking expert advice can ensure individuals make informed decisions about buying or selling property.
