- Nationwide price index hits a two-year high
- Halifax survey seen confirming positive trend
- Buyers still boycotting housebuilding stocks
Shares in UK housebuilders received an early New Year’s lift after the latest Nationwide price survey showed the market ended on a high note last month with particular strength in northern England.
However, the rally didn’t last long with Barratt Redrow (BTRW), Berkeley Group (BKG) and Persimmon (PSN) slipping into the red by mid-morning leaving just Taylor Wimpey (TW.) holding onto a small gain.
‘SURPRISINGLY RESILIENT’
House prices ‘ended on a strong footing’ said Nationwide chief economist Robert Gardner, rising 4.7% on an annual basis in December to an average of £269,426, the highest level in two years although still slightly below the all-time high recorded in the summer of 2022.
Within England, there was a clear north-south divide through 2024 with the North seeing prices up 5.9% year-on-year while Southern England (including London) saw prices rise just 2.2% - the South West was the best-performing southern region with 2.7% annual price growth.
By property type, terraced houses saw the biggest increase in prices followed by flats, then semi-detached houses, while detached houses saw the smallest gain.
Looking back on 2024, Gardner described mortgage market activity and house prices as ‘surprisingly resilient’ given the ongoing affordability challenges facing potential buyers.
Relative to average earnings, house prices remain elevated which means for first-time buyers getting enough money together for a deposit is still a struggle, on top of which mortgage rates are significantly higher than they were coming out of the pandemic, before the Bank of England started tightening.
Today’s Nationwide report is likely to be backed up by the latest Halifax survey which comes out next week – in November, the Halifax showed house prices rising at 4.8% with the average house costing £298,000 or 10% more than the Nationwide average.
