That’s according to Nationwide, which said that UK property prices were up by 1.2% between October and November to reach £268,144.
The mutual noted that this meant the annual growth rate rose to 3.7% from 2.4% in October, the fastest rise in two years.
Robert Gardner, Nationwide’s chief economist, said: “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.”
“The pickup in price growth is unlikely to have been driven by upcoming stamp duty changes, since the majority of mortgage applications commenced before the Budget announcement.
“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.”
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Looking ahead
“Gauging the underlying strength of the market will be more difficult in the coming months,” said Gardner, “as the upcoming stamp duty changes will provide an incentive for buyers to bring forward house purchases to avoid paying additional tax.”
Nationwide predicts this could means a rise in transactions in the first three months of 2025 followed by a ‘weakness’ in the following three to six months, as we’ve seen in the wake of previous stamp duty changes.
Sarah Coles, head of personal finance at Hargreaves Lansdown, added: “We might well see activity remain higher in the coming months, as buyers hurry to get in ahead of the end of the stamp duty holiday on 31 March.
“However, as prices head to just 1% below their peak, and mortgage rates remain relatively high, there’s a growing chance that affordability raises its ugly head again. This could keep a lid on both sales and prices, as it just becomes too big a stretch to get onto the property ladder – or move up it.”
