House prices surprise with fastest rise for two years, says Nationwide
House prices grew at the fastest pace in two years in November, according to the latest Nationwide survey.
The bank said the price of a typical UK house rose 3.7% last month compared with the same period last year, with property values near record highs.
The report said the acceleration in house price growth was “surprising given that affordability remains stretched by historical standards”.
However, it noted that the housing market has remained “relatively resilient” in recent months, with the number of mortgages approved close to pre-pandemic levels.
Nationwide said house prices rose 1.2% between October and November, the biggest month-on-month rise since March 2022.
According to building society figures, properties are currently selling for an average of £268,144, close to the record high of £273,751 set in August 2022.
Data released by the Bank of England last week showed that the number of mortgage approvals last month reached the highest level since August 2022.
Nationwide chief economist Robert Gardner said low unemployment combined with wage growth outpacing inflation was helping to “support” the housing market.
Chancellor of the Exchequer Rachel Reeves said in the October budget that stamp duty cuts in England and Northern Ireland would end in April next year.
However, Gardner said it was “unlikely” that this change was responsible for the strong rise in house prices in November “as most mortgage applications started before the budget”.
The changes mean buyers will start paying stamp duty on properties over £125,000, rather than currently on properties over £250,000.
Currently, first-time buyers pay no stamp duty on homes under £425,000, but this will drop to £300,000 in April.
Nationwide said the stamp duty changes mean it expects a huge increase in house sales in the first three months of 2025 as people try to meet deadlines, but activity will fall in subsequent months.
Overall, though, Gardner said he expects the housing market to gradually strengthen as lower interest rates and higher wages increase consumers’ spending power.
