LONDON (dpa-AFX) - UK house prices grew at the slowest pace since April 2024 largely due to the high base effects, data from the Nationwide Building Society showed on Friday.
House prices posted an annual growth of 0.6 percent in December, which was weaker than the 1.8 percent rise in November. Prices were expected to climb 1.2 percent.
On a monthly basis, house prices dropped 0.4 percent, in contrast to the 0.3 percent increase seen in November.
'Despite the softer end to the year, the word that best describes the housing market in 2025 overall is 'resilient',' Nationwide Chief Economist Robert Gardner said.
Although consumer sentiment was relatively subdued, with households reluctant to spend and mortgage rates around three times their post pandemic lows, mortgage approvals remained near pre-Covid levels, Gardner observed.
Stamp duty changes that took effect at the beginning of April created volatility through the spring and summer. Transactions spiked in March to avoid additional tax and activity softened in the following months.
Affordability constraints eased somewhat with house price growth well below the rate of earnings growth and a steady fall in mortgage rates.
Going forward, housing market activity is expected to strengthen a little further as affordability improves gradually via income growth outpacing house price growth and a further moderate decline in interest rates, the chief economist said.
Nationwide expects house price growth to be broadly in the 2 percent to 4 percent range.
Gardner said the changes to property taxes announced in the Budget are unlikely to have a significant impact on the market.
'The increase in taxes on income from properties may dampen buy-to-let activity further and hold down the supply of new rental properties coming onto the market, which could, in turn, maintain some upward pressure on private rental growth,' Gardner said.
In the fourth quarter, average house prices grew 0.7 percent sequentially and advanced 1.7 percent from the same period last year.
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