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Halifax reported that British house prices unexpectedly fell by 0.2% in December 2024, marking the first drop since March, though they were still 3.3% higher year-on-year. This annual growth fell short of the 4.2% forecast by economists, who had also predicted a 0.4% rise for December. Rival lender Nationwide reported a 0.7% monthly increase, but Bank of England data showed mortgage approvals in November were at their lowest since August. Halifax attributed the market's earlier strength to falling mortgage rates, wage growth, and pre-tax hike purchases. Halifax expects modest price growth in 2025, assuming employment conditions remain stable.
It was reported on Tuesday by Halifax, a mortgage lender and part of Lloyds Banking Group, that British house prices experienced an unexpected decline last month, marking the first drop since March. Despite this, house prices ended the year higher than they were in December 2023. Halifax's data revealed that house prices fell by 0.2% in December, following a 1.2% rise in November. On an annual basis, house prices were 3.3% higher, though this was below the 4.2% increase projected in a poll conducted by Reuters among economists. Advertisement
According to economists, house prices had been expected to rise by 0.4% in December alone. However, contrasting data was reported by Nationwide, a rival mortgage lender, which indicated a 0.7% monthly increase in house prices for December. Meanwhile, data from the Bank of England revealed that mortgage approvals, often viewed as an early indicator of house price trends, had dropped to their lowest level since August during the month of November.
Halifax attributed the rise in house prices during the latter half of 2024 to several factors. These included reductions in mortgage rates, continuous growth in real wages, and a surge in buyers aiming to complete purchases before the property purchase tax increase scheduled for April 2025. The lender noted that these elements had supported the market in maintaining upward momentum during that period.
Amanda Bryden, the head of mortgages at Halifax, expressed that provided employment conditions did not experience a significant downturn beyond the recent softening, buyer demand was expected to remain relatively stable. Taking all relevant factors into account, Bryden mentioned that Halifax continued to anticipate modest growth in house prices for the current year.
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