UK house prices rose 1.2% in November alone, taking the annual growth rate to 3.7% from 2.4% a month ago.

This is the fastest growth rate since November 2022 and takes average house prices to just 1% below their all-time high.

However the Nationwide – which produced the figures – suggest the rise is not down to first time buyers trying to beat the spring 2025 stamp duty change.

Robert Gardner, Nationwide’s Chief Economist, says: “The acceleration in house price growth is surprising, since affordability remains stretched by historic standards, with house prices still high relative to average incomes and interest rates well above pre-Covid levels.

“The pickup in price growth is unlikely to have been driven by upcoming stamp duty changes[1], since the majority of mortgage applications commenced before the Budget announcement. 

“Housing market activity has remained relatively resilient in recent months, with the number of mortgage approvals approaching the levels seen pre-pandemic, despite the higher interest rate environment.

“Solid labour market conditions, with low levels of unemployment and strong income gains, even after taking account of inflation, have helped underpin a steady rise in activity and house prices since the start of the year. Household balance sheets are also in good shape with debt levels at their lowest levels relative to household income since the mid-2000s.

“Gauging the underlying strength of the market will be more difficult in the coming months as the upcoming stamp duty changes will provide an incentive for buyers to bring forward house purchases to avoid paying additional tax.

“This is likely to lead to a jump in transactions in the first three months of 2025 (especially in March) and a corresponding period of weakness in the following three to six months, as occurred in the wake of previous stamp duty changes. This has the potential to shift the demand/supply balance in the near term and impact price movements. 

“But, providing the economy continues to recover steadily, as we expect, the underlying pace of housing market activity is likely to continue to strengthen gradually as affordability constraints ease through a combination of modestly lower interest rates and earnings outpacing house price growth.”