House prices slipped back in December but have ended the year 1.4% higher according to the latest price index from Rightmove.
The residential property website said that asking prices dropped by 1.7% in December, to give an average property price of £360,197 on the site. But Rightmove said that this dip was in line with the usual seasonal lull.
Despite the time of year and higher mortgage rates in the market, activity remains strong with the number of sales agreed up 22%, and new buyer demand up by 13% when compared to the same period last year.
Rightmove predicts that many movers are waiting for the what it terms the “Boxing Day bounce”. Last year Rightmove says it saw a record number of sellers listing on the market at that time of year, while buyer demand rose by 273% between the Christmas lull and Boxing Day.
Overall Rightmove is predicting that new seller asking prices will rise by 4% over the next year, as it expects mortgage rate to fall back again, improving affordability and helping to stimulate market activity.
Its figures also show that market activity is also being driven by forthcoming stamp duty changes. At the end of March temporary increases to thresholds which were introduced in 2022 will be removed.
Rightmove said sellers of smaller properties in higher-priced areas are trying to beat the deadline to avoid higher tax, which has led to some price reductions.
It found that over the last four weeks, the number of sellers of typical first-time buyer homes with two bedrooms or fewer in London coming to market is up by 20%, the most of any regional market sector. In second place is the South East at +16%, which is also the second most expensive region.
In contrast Rightmove adds that prices are holding up best in the first-time-buyer sector, especially homes priced below the £300,000 threshold — which are unaffected by these changes. For example Rightmove said prices for typical first-time-buyer homes in the North East are up by 1% this month, starkly contrasting this month’s national 1.7% fall across all property types.
Looking at these regional figures Rightmove found that the biggest monthly fall was in London, where prices were down 3.2%, giving an annual price fall of 0.8%.
The smallest monthly fall was in the South West, where prices were down by just 0.4%, and the annual price rise was 1%.
Properties in the North West saw the largest annual price increase, up 3.8% on the year. This was followed by properties in Wales (up 2.9%) and Yorks and Humber and the South East (both up by 2.5% year on year).
Rightmove’s director of property science Tim Bannister: “New sellers in December have to work particularly hard to capture the attention of Xmas-party and festivity-distracted buyers, and the 1.7% average monthly fall is a fitting gift for those who are still buying homes rather than presents.
“Despite this monthly drop, prices have risen by 1.4% compared with this time in 2023, broadly in line with our prediction of a 1% rise in prices this year. We are now looking ahead to the traditional Rightmove Boxing Day bounce in home-mover activity, which has increasingly become a key date in the housing market calendar.
He adds: “Looking at our data and the UK’s underlying housing needs, there are lots of reasons to be positive about next year. However, as we’ve seen several times this year, the market is sensitive to unexpected events and the direction of travel can change.
“The stamp duty changes are a cloud over the market at the moment, with some groups much more impacted than others, and therefore keen to avoid the additional charges. After the important first three months of the year in 2025, a lot depends on how quickly normal activity is resumed with higher stamp duty in England. A Bank Rate cut and some mortgage rate falls early on in the year would help to settle the market and provide a boost to sentiment and consumer confidence.”
Propertymark chief executive Nathan Emerson adds: “Across the year we have witnessed the housing market show incredible resilience with strong growth across the year. We have, however, seen many twists and turns, with the housing market duelling aspects such as high inflation, challenging interest rates, uncertainty surrounding the general election in July and the aftereffects on subjects such as Stamp Duty following the recent budget.
“Into 2025, we hope to see progress on a number of key subjects such as Planning and Infrastructure Bill, which will pave the way for the UK Government to kick start their ambitious plans of delivering 1.5 million new homes by 2029 and help level out the current mismatch between housing supply and demand.”