House prices paused for breath in December

House prices decreased by -0.2% in December, whilst annually, property prices are up +3.3% (vs +4.7% last month).

Typical property now costs £297,166 and Northern Ireland maintains the strongest UK annual house price growth.

Jonathan Hopper, CEO of Garrington Property Finders, said, “December’s dip in house prices is likely to be little more than a pause for breath before the January bounce.

“Across the property market as a whole, business has been brisk during the first few days of the year. Pent-up demand is beginning to surface and several property portals reported record Boxing Day traffic.

“Activity is especially strong among first-time buyers, many of whom are racing to get into their new home before the stamp duty thresholds change at the end of March.

“This sense of urgency has led some first-timers to view in haste and offer high in order to do a deal quickly and give themselves a fighting chance of completing their purchase before the tax changes take effect.

“But higher up the market, things are proving tougher for sellers. A surge in the number of homes for sale has given buyers an abundance of choice, and with it the leverage to drive a hard bargain.

“In response, many sellers are having to hold down their asking prices or risk having their home sit unsold on the shelf.

“At the same time, most wealthy buyers remain highly price sensitive. With plenty of prime property to choose from, many are prioritising value, taking their time and negotiating hard – all of which is keeping price growth in check.

“With interest rates set to fall during 2025, cheaper mortgages will inject additional momentum to the market. But the pace of price rises is likely to stabilise once the temporary distorting effect of the stamp duty changes is past.”

Director of Benham and Reeves, Marc von Grundherr, said, “A marginal monthly decline in the rate of house price growth during December highlights the usual seasonal lull caused by the festive break. However, a strong annual rate of growth demonstrates a market that has very much found its form during the latter stages of 2024, following a period of prolonged economic turbulence largely driven by a spike in interest rates.

Of course, affordability remains a sizable obstacle for today’s buyers, but the market resilience seen throughout 2024 has provided a very strong foundation for 2025 and it’s widely predicted that house prices are only going to go one way and that’s up.”

CEO of Yopa, Verona Frankish, said, “December saw a first monthly decline in house prices following five consecutive months of positive growth, albeit a very slight drop, but this is certainly no cause for concern given the seasonality at play, with the market finishing the year in a far stronger position on an annual basis.

In fact, a pause for breath was probably required ahead of what is set to be a very busy first quarter, as the stamp duty countdown continues with relief thresholds set to increase as of 1st April this year.

As a result, we can expect house prices to continue to climb, with 2025 predicted to bring another year of upward growth.”