UK house price growth rebounds in November
2024.12.16 08:35
House prices in the UK rebounded in November, rising 1.2% from a month earlier Nationwide Building Society (LON:) said in a a report on Monday.The annual growth rate rebounded to 3.7%, from 2.4% in October, which was the fastest pace since November 2022. House prices are now just 1% below their all-time peak, the report said.
Commenting on the figures, Nationwide’s Chief Economist Robert Gardner noted the strong rebound in the annual growth rate, emphasizing that the 3.7% increase in the price of a typical UK home year-on-year is the fastest for a two-year period. He found the acceleration in house price growth surprising given the stretched affordability, with high house prices relative to average incomes and interest rates exceeding pre-pandemic levels.
Gardner said housing market activity has remained robust, with mortgage approvals nearing pre-pandemic levels in a higher interest rate environment. He attributed the steady rise in activity and house prices since the start of the year to solid labor market conditions, low unemployment, strong income gains, and household debt levels at their lowest in relation to income since the mid-2000s.
Gardner also noted that upcoming stamp duty changes are unlikely to have driven the recent pickup in price growth, as most mortgage applications began before the Budget announcement. However, he expects these changes to incentivize buyers to complete purchases before additional taxes are imposed, potentially leading to a surge in transactions in the first quarter of 2025, particularly in March, followed by a period of weakness.
Gardner added that if the economy continues to recover steadily, the underlying pace of housing market activity should gradually strengthen, aided by a combination of modestly lower interest rates and earnings growth outpacing house price increases.
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