British house prices unexpectedly fell by 0.2% in December after a 1.2% increase in November, according to Halifax figures on Tuesday.
Despite this decline, house prices finished 2024 higher than December 2023, with a 3.3% annual increase—below the 4.2% rise anticipated by economists, according to Reuters.
Halifax Head of Mortgages, Amanda Bryden, noted that mortgage affordability will continue to be a challenge, especially as the bank rate is expected to decrease more gradually than previously anticipated.
She also pointed out that the housing market has been supported recently by falling mortgage rates, income growth, and the upcoming Stamp Duty policy changes.
“However, providing employment conditions don’t deteriorate markedly from a more recent softening, buyer demand should hold up relatively well and, taking all this into account, we’re continuing to anticipate modest house price growth this year,” added Bryden.
Last week, the Nationwide Building Society forecasted that house price inflation could return to the 2-4% range in 2025 once stamp duty-related volatility settles.
Capital Economics’ economist, Ashley Webb predicted mortgage rates will decrease more than anticipated, reaching 4.0% by 2026, with house prices set to rise by 3.5% in Q4 2024 and 4.5% in Q4 2026.
In 2024, the Bank of England cut its benchmark interest rate by 50 basis points, with the first reduction in August and a second one in November.
