House prices in West Midlands rise by 4.5 per cent in last year

But there is evidence that the market may be slowing, with national figures showing that prices dipped by 0.2 per cent month-on-month on average in December following five months in a row of rises.

On an annual basis, property prices increased by 3.3 per cent typically, taking the average UK house price to £297,166, Halifax said.

The average price of a house in the West Midlands is now £259,365, according to the Halifax.

That is higher than prices in the East Midlands, where the average is £244,274 and where there has been a 3.7 per cent increase year-on-year.

One of the lowest house price figures for the UK is in Wales, where the average house is now worth £226,646, a 4.6 per cent jump on last year.

Amanda Bryden, head of mortgages, Halifax , said: "Prices fell back slightly in December, by 0.2 per cent, following five consecutive monthly increases.

"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."

She said changes to stamp duty from April, which will see the "nil rate" band for first-time buyers shrink from £425,000 to £300,000, have given prospective first-time buyers more motivation to get on the housing ladder and bring any home-buying plans forward. Stamp duty applies in England and Northern Ireland .

Ms Bryden said that, looking to 2025, "mortgage affordability will remain a challenge for many, especially as the Bank of England base rate is likely to come down more slowly than previously predicted.

"However, providing employment conditions don't deteriorate markedly from a more recent softening, buyer demand should hold up relatively well and, taking all this into account, we're continuing to anticipate modest house price growth this year."

London continues to see the most expensive houses, with an average price of £547,614, up 3.3 per cent in a year.

The cheapest is in the North East, at £174,454, up 4.6 per cent.

Nathan Emerson , CEO of property professionals' body Propertymark, said: "As people start to feel more settled within their financial position, and with an expected rush as many people across England and Northern Ireland provision themselves to navigate stamp duty rises from April, we expect to see an upbeat and confident start to the year."

Mark Harris , chief executive of mortgage broker SPF Private Clients, said: "With HSBC, Halifax and Leeds Building Society among those lenders reducing some of their mortgage rates this month, the new year has got off to an encouraging start. Borrowers will be hoping that other lenders follow suit and that the Bank of England delivers further rate reductions, helping ease affordability concerns."

Iain McKenzie , CEO of the Guild of Property Professionals, said: "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."

Karen Noye , a mortgage expert at Quilter, said: "First-time buyers are a critical element of the housing market but piling on additional affordability pressures, at a time when purchasing a first home is already extremely difficult, means we could see a reduction in such purchases.

"This would not only be disappointing news for those who had hoped to take that first step but it would also likely ripple across the market and we could see a 'gluing up' effect if chains stall and transactions slow as a result."

Matt Thompson , head of sales at London -based estate agent 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."

Alice Haine , personal finance analyst at Bestinvest by Evelyn Partners , said: "Two interest rate cuts in 2024 have not entirely eased the mortgage misery for many borrowers.

"While average two and five-year mortgage rates did end the year lower than they started it, a higher inflation reading in December could result in a potentially slower pace of rate reductions in 2025. It means mortgage rates may not be heading downwards as fast as many borrowers would like."

Tom Bill , head of UK residential research at Knight Frank, said: "The current rate of house price growth will come under more pressure as higher borrowing costs triggered by the Budget start to bite. A number of buyers are still sitting on sub-4 per cent mortgage offers made before October, which has supported demand in recent months."

Marc von Grundherr, director of London estate agents Benham and Reeves, said: "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."

Here are average house prices followed by the annual increases, according to Halifax . The regional annual change figures are based on the most recent three months of approved mortgage transaction data.

East Midlands , £244,274, 3.7 per cent

Eastern England , £336,426, 3.1 per cent

London , £547,614, 3.3 per cent

North East, £176,454, 4.6 per cent

North West, £238,832, 5.3 per cent

Northern Ireland , £205,895, 7.4 per cent

Scotland , £209,959, 2.4 per cent

South East, £389,431, 3.1 per cent

South West, £305,326, 3.8 per cent

Wales , £226,646, 4.6 per cent

West Midlands , £259,365, 4.5 per cent

Yorkshire and the Humber, £213,226, 4.0 per cent