House prices dropped for the first time in nine months in December, data from Halifax shows, but still finished the year 3.3% higher than 12 months ago.

The average home price fell by 0.2% last month to £297,166, following five consecutive monthly increases. The December fall was the first since a 0.9% drop last March.

Halifax head of mortgages Amanda Bryden said: “The housing market was broadly steady at the start of 2024, with house price growth taking off from the summer onwards.

“In the latter half of the year, house prices grew in response to the falls in mortgage rates, alongside income growth, both leading to financial pressures somewhat easing for buyers.

Bryden added: “Impending changes to stamp duty thresholds have also given prospective first-time buyers even greater motivation to get on the housing ladder and bring any home-buying plans forward.

“Together, these elements meant mortgage demand picked up, hitting the highest level in over two years and back to levels seen pre-pandemic.”

Northern Ireland maintained the strongest property price growth of any nation or region in the UK, rising 7.4% over the year, hitting £205,895 in December.

In Wales, prices were up 4.6% compared to the previous year, with properties now costing £226,646 on average.

Scotland saw house prices rise 2.4% over the year to come in at £209,959 last month.

London retains the highest average house price in the UK, at £547,614, up 3.3% from last year.

Matt Thompson, head of sales at Chestertons, said: “December 2024 was one of the busiest Decembers in years in terms of buyer demand. This was driven by first-time buyers who were keen to get on the property ladder before this year’s changes to stamp duty but also by second-steppers, including young families, wanting to upsize.”

Also reflecting on the latest data, Iain McKenzie, CEO of The Guild of Property Professionals, commented: “The market proved it resilience in 2024, and it has begun this year in a strong position with increased choice for buyers. While pricing will remain key, it is expected that we will continue to see house prices edge up over 2025.

“The rush to get transactions over the line before the Stamp Duty changes has been a catalyst to the market’s buoyancy as we headed into this year. There were also a number of buyers and sellers who stepped off the side-lines after postponing their decision to move due to higher mortgage rates. Zoopla have reported that there are currently around 283,000 sales progressing their way towards completion in the first half of this year, which is largest pipeline the market has seen in over four years.

“We could see demand temper after the Stamp Duty changes, however, the expected rate cuts should play a part in increasing sentiment in the market, bringing down mortgage rates and enticing more activity. While the Bank of England decided to hold the rate at 4.75% during the December meeting due to higher-than-expected inflation figures, financial markets are pricing in cuts – how many how cuts remain to be seen and will depend on inflation playing the game. It will be a balancing act of enticing economic growth, while keeping the reins pulled back on inflation.”

The director of Benham and Reeves, Marc von Grundherr, noted: “A marginal monthly decline in the rate of house price growth during December highlights the usual seasonal lull caused by the festive break. However, a strong annual rate of growth demonstrates a market that has very much found its form during the latter stages of 2024, following a period of prolonged economic turbulence largely driven by a spike in interest rates.

“Of course, affordability remains a sizable obstacle for today’s buyers, but the market resilience seen throughout 2024 has provided a very strong foundation for 2025 and it’s widely predicted that house prices are only going to go one way and that’s up.”

Jonathan Handford, interim managing director at Fine & Country, added: “All signs point to a robust finish for the UK property market in 2024, as house prices show positive annual growth, fuelled by buyers eager to secure new homes ahead of the April stamp duty changes.

“In the wake of the Autumn Budget announcement, which lowered the stamp duty threshold from £250,000 to £125,000, the market has seen a surge in activity. Both house prices and property transactions have risen, reflecting heightened demand from consumers looking to maximize their savings before the tax adjustment takes effect.

“The latest housing index supports this trend, showing an annual price increase of 3.3%, signaling both an improving economy and a proactive market response. However, month-on-month, prices settled in December, which is more reflective of the traditional seasonal slowdown.

“In 2024 the Bank of England implemented two interest rate cuts. These moves have bolstered consumer confidence, encouraging more buyers to enter the market. Lower borrowing costs have particularly benefited first-time buyers and those remortgaging, further stimulating demand.

“While momentum may slow after the stamp duty changes, many experts remain optimistic about continued growth into 2025. Some experts predict the Bank of England could start to lower interest rates as early as February.

“However, affordability challenges persist, and predicting the date and extent of the next rate cut remains uncertain amid economic volatility, and inflationary pressures.

“The 2025 housing market may become more buyer-friendly as pre-April urgency fades. Economic pressures could lead sellers to reduce prices and offer better terms, potentially creating a buyer’s market later in the year.”