
Nationwide made the prediction in its round up of the market in 2024 and outlook for 2025.
It said that housing market activity proved resilient in 2024, ‘despite ongoing affordability challenges’.
Robert Gardner, Nationwide’s chief economist, explained: “At the start of the year, house prices remained high relative to average earnings, which meant the deposit hurdle remained high for prospective first-time buyers, a challenge that had been made worse by record rates of rental growth in recent years, which has hampered the ability of many in the private rented sector to save.
“Moreover, for many of those with sufficient savings for a deposit, meeting monthly payments was a stretch because borrowing costs remained well above those prevailing in the aftermath of the pandemic.”
Nationwide noted that a typical mortgage rate for someone with a 25% deposit hovered around 4.5% for much of the year. This was three times the 1.5% on offer in late 2021 before the Bank of England started to raise Bank Rate.

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Gardner continued: “As a result, it was encouraging that activity levels in the housing market increased over the course of 2024. The number of mortgages approved for house purchase each month rose above pre-pandemic levels towards the end of the year.
“Similarly, after starting the year registering small annual declines, the pace of house growth moved firmly into positive territory, approaching 4% in November.”
Looking ahead
Nationwide expects house prices to grow by 2-4% in 2025, as market activity increases.
Gardner said that changes to stamp duty from April will cause volatility as buyers race to beat the deadline. He added: “This will lead to a jump in transactions in the first three months of 2025 (especially in March) and a corresponding period of weakness in the following three to six months, as occurred in the wake of previous stamp duty changes. This will make it more difficult to discern the underlying strength of the market.
“But, providing the economy continues to recover steadily, as we expect, the underlying pace of housing market activity is likely to continue to strengthen gradually as affordability constraints ease.”