T
he UK housing market has hit a snag, with the largest fall in new buyer inquiries since the financial crisis, excluding lockdown periods. Average property prices dipped 0.2% between November and December, marking the first monthly drop since March, according to Halifax data. This decline brings the average property value down to £297,166 ($372,560).

    House prices rose 3.3% on the year in December, but annual growth slowed from 4.7% in November. Economists had predicted a 0.4% price rise for December. Shares of major UK homebuilders fell following the data release.

    The market's momentum was disrupted by the government's tax-and-spend Budget and higher mortgage rates. Halifax's Amanda Bryden expects mortgage affordability to remain a challenge, even as prices grow modestly in 2025. The Bank Rate is likely to decrease more slowly than predicted, further pressuring transactions.

    Mortgage approvals fell short of expectations in November, and the combined data suggests wobbles have emerged in the housing market since the Budget. Analysts expect transactions to pick up initially due to changes to Stamp Duty Land Tax, but this boost may be short-lived, with a lull expected from the second quarter onward.

    Knight Frank has revised down its UK property price growth forecasts, expecting 2.5% growth in 2025 and 3% in 2026, down from previous predictions of 3% and 4%, respectively.