Nationwide reports a higher than expected figure for UK house prices in 2024
Happy New Year! As we step into 2025, the latest Nationwide House Price Index has given us as a mortgage broker, plenty to reflect on regarding the resilience of the UK housing market in 2024. According to the report from Nationwide, against the backdrop of rising mortgage rates and affordability challenges, the market demonstrated remarkable strength, closing the year with a 4.7% annual increase. The average UK home price reached £269,426, nearing the all-time high recorded in summer 2022. In this blog, we will look at the data reported by Nationwide and also offer our own initial predictions for 2025.
A Year Of Unexpected Resilience For UK House Prices
Despite higher mortgage rates averaging around 4.5% for much of the year – a far cry from the sub-2% rates of late 2021 – the UK housing market exceeded expectations. December alone saw a 0.7% month-on-month price increase, building on a 1.2% rise in November. Nationwide’s Chief Economist, Robert Gardner, highlighted the surprising robustness of the market, with mortgage activity and house prices defying affordability concerns. Toward the year’s end, mortgage approvals even surpassed pre-pandemic levels, a clear sign of growing buyer confidence.
The North-South Divide
One of the most striking trends of 2024 was the continued divergence in house price growth between northern and southern regions. Northern areas outpaced their southern counterparts, with Northern Ireland leading the way for the second consecutive year with a 7.1% annual increase. The North of England also saw impressive gains, with prices rising by 5.9%, while Northern England overall recorded a robust 4.9% growth.
In contrast, the south experienced more subdued growth. London’s property market saw a modest 2% rise, with the average home price in the capital now standing at £525,535. East Anglia was the weakest performer nationwide, with only a 0.5% increase over the year.
Property Types: Terraced Homes Shine
Among property types, terraced homes led the charge in 2024, with prices rising by 4.4%. Flats also showed signs of recovery, achieving their best annual performance since 2021 with a 4% increase. Detached homes, while maintaining their long-term growth advantage, saw a slower rise compared to recent years. Since early 2020, detached homes have appreciated nearly 27%, significantly outpacing flats, which rose by 15% over the same period.
Mortgage Outlook For 2025 – Louis Mason
Based on the last year, Louis Mason, Marketing and Communications Director at Oportfolio Mortgages, shared his insights on what this year may hold for the mortgage market:
“2024 demonstrated that the UK housing market is more adaptable than many had anticipated. As we move into 2025, we expect mortgage rates to remain relatively stable in the first half of the year, with potential for slight easing if inflation continues to cool and economic conditions improve. Buyers should prepare for rates to hover between 4% and 4.5% initially before dropping below 4% eventually, though a return to sub-3% rates seems unlikely in the near term.
First-time buyers and remortgagers alike can benefit from reviewing their options early and consulting with experienced brokers to secure the best deals. While affordability challenges remain, lenders are showing a willingness to innovate with products designed to support diverse buyer needs. With careful planning, 2025 can be a year of opportunity for those looking to step onto or climb the property ladder.”
Looking Ahead
The Nationwide report shows one key takeaway: resilience and adaptability continue to define the UK housing market. While challenges remain, the positive momentum seen in 2024 provides a solid foundation for 2025. Whether you’re a first-time buyer, seasoned investor, or considering remortgaging, Oportfolio Mortgages is here to guide you through the ever-evolving landscape of property finance. Start your 2025 property journey with confidence. Contact our team at Oportfolio Mortgages today for expert advice tailored to your needs.
