House prices edged upwards in December but still remain lower than a year ago according to the latest house price data from e.surv Acadata.
The monthly increase was just 0.2%, giving an average property price of £357,365 in England and Wales. However this is still 2% lower than the price in December 2023, and 6% below the late 2022 peak.
This is a less positive picture than has been drawn by other housing price surveys for the month, but may reflect the fact that this Acadata information also includes cash purchases alongside mortgage sales.
However, e.surv says the modest uptick last month is an indication that the market is starting to recover with activity, in terms of mortgage lending and the number of transactions exceeding previous expectations.
The data shows that while market conditions have shown signs of strengthening across most of England and Wales, there are still clear geographic differences.
Only northern England was in positive territory from November to December last year. For the same period, middle England and Wales were in limbo, whilst the regions of southern England continued to see annual prices retreating, albeit more slowly than a year ago.
The more anaemic recovery in the south reflects more intense affordability pressures, according to e.surv, and as a result greater sensitivity to higher mortgage costs.
Looking ahead to 2025, e.surv says that increased activity is likely to be further supported by the changes to stamp duty, with buyers looking to bring forward purchase to avoid the additional SDLT charges from April. Based on previous evidence of such moves, it says the market is likely to be busier in the run up to April (when these changes come into force) after which the market is likely to be quieter than usual for a period of months.
It adds that Wales has a slightly different regime and the higher rates of land transaction tax announced in December may be made permanent. It says this will impact on the second homes market which may ease some affordability pressures.
Back in England the long term housing plan is due to be announced probably alongside the spending review in the middle of the year. This will set out the government’s intended policy support towards home ownership alongside its continuing focus on boosting social housing provision.
e.surv director Richard Sexton says: “This year-end performance reflects the stabilising effects of improving consumer confidence and a market that has adjusted to economic challenges. The Chancellor’s announcement on Stamp Duty changes is anticipated to drive a busier start to 2025.
“However, regional disparities continue to shape the overall picture. Annual price falls for England and Wales stands at -2.0%, but when London and the South East are excluded, the decline narrows to -1.2%, highlighting contrasting regional market dynamics
“Looking ahead, attention will turn to the government’s forthcoming long-term housing plan, which is expected to address affordability challenges and increase housing supply. While the advent of new stock is still some way off , the very clear direction of travel will give buyers cause for optimism in the longer run.
“The housing market in 2024 demonstrated its resilience, and there is cautious optimism for further stability and growth in the year ahead.”