Brokers welcome early festive 'gift'… and the promise of a busy new year
There’s not a red bow or gift tag in sight, but the latest house price data could be viewed as an early Christmas present for a property market that’s had to negotiate plenty of challenges in recent years.
Certainly, some mortgage brokers believe that a rise of 1.2% in UK house prices month on month in November, in the Nationwide House Price Index, is a sign of a market recovery.
The annual growth rate rebounded to 3.7%, from 2.4% in October – the fastest rise since November 2022, and house prices are now just 1% below the all-time peak.
Kim Balasubramaniam (pictured left), co-director and co-founder of mortgage and financial brokers, Versed, is feeling upbeat.
“The recent uptick in average property prices both annually and month-on-month suggests that the property market is finding its feet again after a period of uncertainty,” Balasubramaniam told Mortgage Introducer. “It will be interesting to see what impact the upcoming Stamp Duty changes, at the end of March 2025, have and whether we have just seen an influx of purchases wanting to complete before then. Certainly, we have seen a recent rise in the number of clients coming to us having had offers accepted and wanting to progress with their purchases, and we hope this continues.”
She added: “If the overall economy continues to recover, I think we can anticipate seeing the property market gain more strength as we move into the new year and beyond. Cautiously optimistic is the phrase for us going into 2025, and I'm hoping it's going to be a great year.”
Affordability challenges persist
Matt Towe (pictured right), CEO at female-focused broker Meet Margo, noted that while house prices are nearing their 2022 peak, signalling a recovery, the market isn’t fully out of the woods yet.
“Affordability remains a significant challenge, with rising prices, fluctuating interest rates, and inflation making it harder for buyers to secure the home they want without stretching their budgets,” Towe said.
“For brokers, the current market presents a mix of opportunities and challenges. The upcoming stamp duty changes may drive a short-term spike in transactions in early 2025, but we anticipate a slowdown afterwards, as seen in previous cycles. This means that while demand for advice is likely to grow, the focus will be on guiding clients through a constrained market to find the most cost-effective deals for their needs."
Read more: Revealed – impact of Stamp Duty relief cut on first-time buyers
Buyers and sellers are ‘pushing transactions’
For Tomer Aboody, director of specialist lender MT Finance, another month of house price growth further indicates the level of confidence in the market which has been evident since the reduction and stability in both mortgage rates and inflation.
"Both sellers and buyers are pushing to transact, as affordability is improving,” said Aboody.
“While the Budget is now behind us, its full impact has yet to be felt. However, we are hopeful that this confidence in the market continues, with further rate cuts expected in the new year.
“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 is a very different story higher up the market, where wealthy buyers are licking their wounds from the Budget.
“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,” Aboody noted.
The price of a typical home increased by 3.7% year-on-year to £268,144, up from £265,738 or 2.4% in October.
Commenting on Nationwide’s data, the lender’s chief economist, Robert Gardner, said housing market activity has remained relatively resilient in recent months, with the number of mortgage approvals approaching the levels seen pre-pandemic, despite the higher interest rate environment.
“The acceleration in house price growth is surprising, since affordability remains stretched by historic standards,” Garner observed, “with house prices still high relative to average incomes and interest rates well above pre-Covid levels.”
