Is Halifax wrong about house price growth in 2025?

In December 2024, the average UK house price experienced a slight downturn, dipping by 0.2% month-on-month after a series of five consecutive monthly increases. According to Halifax, this fluctuation occurred against a backdrop of stronger annual growth, with prices up by 3.3% year-on-year, bringing the average house price to £297,166. Amanda Bryden, head of mortgages at Halifax, commented on the general stability of the housing market at the year's close, attributing previous price increases to improved mortgage rates and rising incomes. As a result, financial pressures for prospective buyers have started to ease. Looking ahead to 2025, Bryden noted that mortgage affordability will remain a major hurdle for many, exacerbated by a slower-than-expected reduction of the Bank of England's base rate. However, she remains optimistic, anticipating that as long as employment conditions do not worsen significantly, buyer demand should remain stable, leading to projections of modest house price growth in the coming year. Notably, anticipated changes to stamp duty, including a reduction in the nil rate band for first-time buyers, are expected to motivate more individuals to enter the housing market early in the year. Experts from various sectors, including Nathan Emerson from Propertymark and Mark Harris from SPF Private Clients, voiced similar sentiments regarding the health of the housing market. They acknowledged that while affordability challenges persist, the prospect of reduced borrowing costs is likely to create renewed confidence among buyers. December 2024 marked an uptick in buyer activity, particularly from first-time purchasers eager to secure homes prior to the anticipated stamp duty changes. Increased demand is also seen among those looking to upgrade their living situations, demonstrating a dynamic market. Despite potential challenges posed by looming affordability issues, experts suggest a foundation of resilience has been established within the housing market in 2024, setting the stage for continued growth in the upcoming year. As predictions of persistent buyer interest persist, the overall market sentiment seems to hold optimism for 2025, indicating a possibility for further stabilization and growth within the housing sector.