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The housing market remains cautious heading into 2025, despite a rush of sales agreed in an attempt to take advantage of the stamp duty discount.
According to Zoopla data, prices returned to growth in November, with the average house price at £267,500, 1.9% higher than a year ago.
The data tracks that of the Office for National Statistics, which reported earlier this week that UK house prices increased by £10,000 in the year to October with the average property costing £292,000.
Meanwhile, the cost of the average home is increasing across all regions and countries ranging from a 0.7% bump in the South East to 6.8% in Northern Ireland.
In England, the average price rose by 3% year on year to £309,000, while in Wales it was up by 4% to £222,000. Scotland saw prices increase by 5.5% to £197,000. In Northern Ireland, the average house price rose by 6.2% to £191,000 year on year, the ONS said.
The sales pipeline is also around 30% higher than this time last year, the housing platform said, with 283,000 homes worth £104bn set to progress to a sale in 2025.
Part of the reason for the rush can be attributed to the fact that, from 1 April 2025, stamp duty discounts afforded to buyers expire.
Despite this movement, however, buyers have become more price-sensitive since the Autumn Budget, agreeing sales price at 3.6% below the asking price, up from 3.2% in July.
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Caution has also set in as a result of elevated mortgage rates. On Wednesday, the Bank of England's monetary policy committee opted to keep its base interest rate at 4.75% as concerns about inflation in other parts of the economy linger. The base rate guides banks' suggested lending costs.
“More sales have supported a return to house price growth across the country but home buyers have become more price-sensitive in recent weeks as mortgage rates drift higher," said Richard Donnell, executive director at Zoopla.
"Affordability constraints will keep the pace of house price growth in check over 2025 but there will be enough price inflation to support 5% more home moves.”
Over the summer of 2024, buyers were more confident as mortgage rates fell, agreeing purchase prices that were, on average, 3.2% below the asking price.
The size of the gap between asking prices and agreed purchase prices is a lead indicator of house price growth, Zoopla said. The gap between the asking and agreed sales price peaked at 4.6% in late 2023 resulting in modest price falls, while in 2021 during the pandemic buyers had to pay the asking price to secure a sale.