In October, housing surveyors in the U.K. recorded the steepest decline in new buyer inquiries since the financial crisis, discounting the Covid-19 lockdowns. December saw U.K. house prices drop for the first time in nine months, with an average decrease of 0.2% from November, resulting in average property values falling to £297,166 ($372,560). Yearly price growth was down to 3.3%, a drop from 4.7% in November. Consequently, shares of major U.K. homebuilders fell. Despite steady price increases earlier in 2024 due to improved sentiments around the election and expectations of interest rate cuts, rising mortgage rates and the recent governmental budget have curbed this momentum. Amanda Bryden from Halifax warned that these higher rates would persist in affecting market dynamics. Following a disappointing mortgage approval report from the Bank of England, analysts anticipate an initial uptick in transactions correlating with new Stamp Duty tax changes coming in April but predict a subsequent slowdown. Knight Frank revised down its price growth forecasts, now anticipating 2.5% growth in 2025 and 3% in 2026, reflecting expectations of ongoing market challenges.
