House prices in the UK rose by 1.2% in the latest Nationwide data release, surpassing expectations and offering a glimmer of hope for a property market that has been experiencing a year of economic uncertainty. This uptick, seen as a sign of resilience, aligns with renewed confidence following government measures introduced in the Autumn Budget.
Daniel Austin, CEO and co-founder of property investment firm ASK Partners, commented on the data, saying: “We continue to see a month-on-month rise in house prices, which is hopefully the sign of an upward trend developing for the remainder of the year going into 2025. The market certainly appears to be showing signs of resilience.”
Government measures boost confidence
The government’s pledge of £5 billion for new homes and the permanent establishment of the mortgage guarantee scheme have been particularly well-received.
The scheme, which enables lenders to offer 95% loan-to-value mortgages, aims to make home ownership more accessible for first-time buyers.
However, Austin cautions that the new lower stamp duty thresholds could offset some of these benefits for those entering the property ladder.
In the rental sector, sustained growth in rental values has positioned real estate as a competitive investment, particularly when compared to gilts.
“Real estate presents growth potential,” Austin noted, emphasising that recent incentives, such as £3 billion in housing guarantee schemes providing lower-cost loans, could attract developers to the Build-to-Rent sector.
Encouraging supply and market stability
The Affordable Homes Programme and funding to unlock stalled developments are also expected to benefit SME housebuilders, increasing housing supply and supporting market stability. For private investors, however, the Higher Rate for Additional Dwellings remains a concern.
Despite these challenges, Austin sees potential for the property market to thrive, driven by sustained house price growth, lower interest rates, and dampened inflation.
“Sustained market growth alongside new initiatives to benefit developers should continue to stimulate the market. As a debt provider, we will be pleased to see more favourable market conditions unlocking strong assets in good locations for well-capitalised borrowers,” he said.
As 2024 draws to a close, the resilience demonstrated by the housing market and the renewed focus on development incentives offer a cautiously optimistic outlook for both buyers and investors heading into 2025.