On a monthly basis, prices dipped by 0.1%.
Emma Cox, managing director of real estate at Shawbrook, said: “The usual December slowdown contributed to a slight month-on-month drop in house prices. However, there was a strong year-on-year rise, likely due to the upcoming removal of stamp duty exemption.
“Further attention will now turn to whether January’s data reflects increased purchasing activity levels ahead of the removal of the stamp duty exemption for first-time buyers.”
Mark Eaton, chief operating officer at April Mortgages, said the year finished strongly as the base rate cut and rush to beat the stamp duty deadline drove buyer demand and pushed up prices.
He added: “But the elephant in the room is that another month of rising house prices spells bad news for first-time buyers that thought the dial was moving in their favour.
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“Our own research shows that in some parts of the country, buyers need deposits of more than £200,000 to afford an average priced home, based on banks’ typical lending limits. In fact, only 14% of the UK’s 100 largest towns and cities are affordable to single-income buyers earning an average salary.
“The scale of the affordability challenge is becoming a major hurdle for prospective buyers across the country.”
Regional and national performance
Northern Ireland reported the strongest annual growth, up 9% in Q4 to £183,259. This was a 1.5% increase in average prices compared to the previous quarter.
This was followed by Scotland, where average house prices increased by 6.9% over 12 months to £188,807. Compared to the month before, this was a 0.5% fall.
In England, average house prices were flat month-on-month at £290,564, but this was 4.3% up on the year before. Wales reported the lowest annual growth in average house prices at 3% to £208,197, which was 0.5% down on the month before.
Within England, house prices in the North East saw the largest average yearly rise with a 6.7% growth to £161,389.
Annual house price inflation was also strong in Yorkshire and the Humber, where this rose 5.9% to £203,983, the North West, with a 5.4% jump to £211,030, and the East Midlands, which reported a 5.3% rise to £242,036.
London was the only region to report no growth, with house prices staying flat at £548,939. Compared to the previous month, average values were 0.3% lower.
Jonathan Hopper, CEO of Garrington Property Finders, said the “divergence between London prices and the rest of the UK” had not been so stark since the post-lockdown ‘race for space’.
He added: “Average property prices in the capital ended 2024 exactly where they began the year. Zero growth over the year as a whole, and we even saw London prices fall in November and December.
“This is partly a whiplash effect from the tax rises announced in the Chancellor’s October Budget, which hit sentiment hard at the top end of the market. Buyers in the capital have since become highly price-sensitive, and willing to negotiate hard on price or simply look elsewhere.
“At the other end of the scale, the market dynamics in Scotland and Northern Ireland are seemingly detached from economic gravity. Two factors underpin their rapid price growth – soaring rent increases have nudged many tenants into buying their first home, and the relatively strong value offered in both nations compared to other parts of the UK has lured price-conscious buyers from elsewhere.”
The only regions in England to see a monthly rise in average house prices were the South East and East of England at 0.6% each, and the North East and East Midlands at 0.5% apiece.
Detached and semi-detached homes up in value
The average value of a semi-detached home increased by 5.6% annually in December to £270,847, the strongest growth for any property type. Detached homes followed with a 5.2% uplift to £440,190.
The average price of terraced homes rose 4.9% to £223,808, while flats and maisonettes were 2.3% higher than last year at £196,361.
There was a 17.7% surge in the average price of new-build properties, averaging £384,787, while resold properties rose 2.2% to £262,503.
Monthly, the value of new-build homes dropped by 1.2%, while resold homes fell by 0.1%.
First-time buyers paid an average of £226,744 for their homes in December, 4.7% higher than the previous year and 0.4% down on the prior month.
Former owner-occupiers paid 4.4% more than last year at £329,952, which was 0.2% up on the month before.
