House prices hit record high in January ahead of stamp duty deadline
According to new data, the average UK house price hit a record high of £299,138 in January ahead of the loss of first-time buyer stamp duty relief in April.
House prices rose 0.7 per month on month and three per cent year on year, with London retaining the highest average house price in the UK at £548,288.
Prices in London rose 2.8 per cent year on year.
“Affordability is still a challenge for many would-be buyers, but the market’s resilience is noteworthy,” Amanda Bryden, Head of Mortgages at Halifax, said.
Bryden anticipated mortgage rates to “hover” between four per cent and five per cent in 2025.
House prices remain high relative to average earnings, with the first-time buyer (FTB) house price to earnings ratio standing at 5.0 at the end of 2024, still far above the long run average of 3.9.
But Braden said there was still “strong demand for new mortgages and growth in lending”.
“With a stamp duty increase looming, some of this demand may have come from first-time buyers eager to complete transactions before the end of March,” she added.
As of March 31, first-time buyers will have to pay the same amount of stamp duty as other buyers.
Tomer Aboody, director of specialist lender MT Finance, said the market wasn’t as confident as the numbers suggested.
“While the numbers suggest a confident market, actual growth in prices is minimal as buyers face affordability challenges.
“The full impact of the Budget has yet to be factored in, so a true indication of where we are would be around spring, when the stamp duty holiday ends.”
Jeremy Leaf, north London estate agent and a former RICS residential chairman, said: “On the ground, recent price resilience has been just as much to do with higher demand as much as insufficient and appropriate stock in more popular areas.”
Northern Ireland continues to have the strongest annual property annual price growth in the UK, at 5.9 per cent.
House prices in Wales were up 3.6 per cent compared to the previous year, with properties now costing an average of £227,397. Prices grew 2.4 per cent year on year in Scotland.
In England, the North East overtook the North West as the region with the strongest annual property price growth, up 5.2 per cent year on year, with properties now costing an
average £178,696.