House prices rise at the fastest rate in two years

House prices climbed by 1.2% in November versus the previous month and on an annual basis they increased by 3.7%, with this annual rate of growth accelerating from 2.4% the previous month.

This marked the fastest rate of house price growth in two years, with house prices now just 2% off the record highs seen in summer 2022.

Robert Gardner, Nationwide’s chief economist, said, “House prices are just 1% below the all-time high recorded in the summer of 2022.

“The acceleration in house price growth is surprising, since affordability remains stretched by historic standards, with house prices still high relative to average incomes and interest rates well above pre-Covid levels.”

Jonathan Hopper, CEO of Garrington Property Finders, said, “The property market has blown through its pre-Budget wobble to end the year on a roll.

“With both average prices and activity rising, and the Bank of England cutting its Base Rate again, the mood in November was more upbeat than the anxious and halting sentiment seen in October.

“Even though many mortgage lenders have yet to pass on the latest Base Rate cut to new borrowers, some would-be buyers are being spurred into action by the realisation that cheaper mortgages are on their way.

“We’re also seeing the first signs of another ‘stamp duty stampede’ as many first-time buyers race to complete their purchases before the stamp duty thresholds change at the end of March.

“But the buoyancy at the lower end of the market, in which some first-time buyers are viewing in haste and offering high in order to secure a home before the tax changes take effect, is not universal.

“It’s a very different story higher up the market, where wealthy buyers are licking their wounds from the Budget and sentiment is settling only gradually.

“With plenty of supply of prime homes for sale, buyers at this end of the market are likely to find themselves spoilt for choice and able to negotiate hard on the price they pay – and this is holding price inflation firmly in check.”

Foxtons CEO, Guy Gittins, said, “After the rate of house price growth slowed in the lead up to the Autumn Budget, the latest figures suggest the market is once again starting to accelerate.

This consistent positivity demonstrates the current strength of the market despite the complications posed by wider economic headwinds. Over the last 12 months we’ve seen a huge increase in new buyer volumes, viewings and offers made and there is a very healthy level of stock currently on the market. So, whilst house prices are climbing, there is certainly a good level of stock for buyers to choose from and the market isn’t overheating due to the usual supply and demand imbalance.

The market traditionally pauses for breath during the festive period, however, we’re seeing a flurry of activity driven by buyers looking to secure stamp duty relief before next April’s deadline. We anticipate the start of next year to be much the same, although those buyers who are looking to take advantage of current stamp duty relief thresholds need to be acting now to stand a chance of completing in time.”

CEO of Yopa, Verona Frankish, added, “Whilst there may have been a momentary pause ahead of the Autumn Budget, it’s clear that market activity has accelerated significantly since then, with the driving factor being the government’s failure to extend current stamp duty relief thresholds beyond March of next year.

As a result, we can expect a very busy end to 2024 and it’s likely that both mortgage approval levels and house prices will trend upwards as the year comes to a close.”