UK house prices rose at the fastest rate in two years in November, according to new data from Nationwide, as buyers raced to beat the changes in stamp duty set for 2025.
House prices rose 1.2% in the month to November and were 3.7% higher over the year.
“The Budget blip was a wrinkle rather than a rift. The housing market has shaken it off, bouncing back to its fastest annual growth since November 2022,” said Sarah Coles, head of personal finance, Hargreaves Lansdown.
“We’ve seen a pick-up in activity from landlords, who put sales in train before the Budget. They may not have had the capital gains tax blow they were expecting in the speech, but given that the Treasury is still more likely to hike taxes for landlords than to cut them in the next few years, there’s a decent chance many of them have decided to get out anyway, while they know where they stand.”
“More properties for sale will have spurred more buyers into action, especially in areas where a lack of choice had been holding them back. We had an indication this could be the case from the Bank of England, as mortgage approvals for new purchases had risen in October – to the highest point since August 2022. We’re getting back into solid pre-pandemic territory, with 68,300 approvals.”
Whether the increase in house prices holds through the change of stamp duty laws next year will depend heavily on interest rates and resulting mortgage rates. Mortgage rates have steadily increased in recent weeks after the Bank of England signal rates may not fall as quickly as previously thought.
The prevailing interest and mortgage rates when the dust settles following the rush to beat stamp duty next year will drive prices through 2025, with affordability still stretched for many first-time buyers.