Mortgage market activity and house prices remained surprisingly resilient in 2024 despite ongoing affordability challenges, according to Nationwide. At the start of the year, house prices were high relative to average earnings, but market activity increased steadily throughout the year.
By the end of 2024, the number of mortgages approved for house purchases each month had risen above pre-pandemic levels. After initially recording small annual price declines, house price growth gained momentum, reaching nearly 4% year-on-year in November.
Nationwide predicts that upcoming changes to stamp duty will create volatility in 2025. Buyers are expected to bring forward their purchases to avoid higher taxes, leading to a spike in transactions in early 2025 — particularly in March — followed by a slowdown in activity over the next three to six months. This pattern mirrors the impact of previous stamp duty adjustments.
Despite this short-term volatility, Nationwide expects housing market activity to strengthen gradually as the economy recovers. Affordability is expected to improve, driven by modest declines in interest rates and wage growth outpacing house price growth. House price increases are forecast to remain in the 2-4% range throughout 2025, supporting a more stable housing market.
