Upcoming changes to stamp duty will “motivate” first-time buyers to purchase a property, according to the Halifax.
The average price of a UK house ended 2024 close to the £300,000 mark, the UK’s largest mortgage broker has said.
Its calculations suggest that UK house prices rose by 3.3% when comparing the end of the year to the start, although the average value fell slightly in December.
This means the average house now costs £297,166, he added.
The figures come days after rival lender Nationwide said the UK property market had been “remarkably resilient” in 2024, with prices rising 4.7% at the end of the year compared to the start.
Both lenders use their own mortgage data and have slightly different criteria when calculating house prices, so Nationwide estimates the average house price at almost £270,000.
Both lenders do not include buyers who purchase homes for cash or leases in their estimates. Cash buyers account for about a third of home sales.
Halifax’s estimate of the average house now costing almost £300,000 will be greeted with dismay by many first-time buyers, but it comes against a backdrop of stark price differences in different parts of the country.
However, Halifax mortgage manager Amanda Bryden said April’s stamp duty changes would give potential first home buyers “even greater motivation to get on the housing ladder and move forward with their plans buying a house.
“Mortgage affordability will remain a challenge for many,” she said.
“However, provided employment conditions do not deteriorate materially following a more recent downturn, buyer demand should hold up relatively well and, taking all of this into account, we continue to anticipate modest price growth real estate this year.”
Housing experts expect sales to rise over the coming months, ahead of the stamp duty changes, before falling afterwards.
Home buyers in England and Northern Ireland will start paying stamp duty on properties over £125,000, instead of over £250,000 currently.
First-time buyers currently pay no stamp duty on homes up to £425,000, but this will drop to £300,000 in April.
A steady reduction in interest rates is also expected in 2024, potentially starting with a cut in February, which could lead lenders to preemptively reduce the cost of new fixed-rate mortgage transactions.
However, Bank of England Governor Andrew Bailey recently said that “the world is too uncertain” to be able to accurately predict when and by how much interest rates will fall.
