Home prices rise for fourth straight month, Halifax says as it hails ‘positive start’ to 2024

Average home prices have risen for the fourth month in a row, according to the latest figures from Halifax.

The mortgage provider revealed that average prices rose by 1.3 percent in January alone.

The typical house now costs £291,029, which is almost £4,000 more than in December.

The rebound in prices in recent months means house prices are up 2.5 per cent year-on-year, based on Halifax data.

Kim Kinnaird, director of Halifax Mortgages, said falling mortgage rates had helped reverse the successive monthly falls in house prices recorded between April and September last year.

Mortgage providers started cutting interest rates from September and this rate reduction continued until 2024. In January alone, more than fifty mortgage providers lowered their home interest rates – some more than once.

Although cuts have largely come to a halt over the past two weeks and some lenders have raised their interest rates, borrowers who get the cheapest deals can now get interest rates of just under 4 percent on a five-year fixed rate period, or just above 4 percent . when fixed for two years.

Kinnaird said: ‘The recent reduction in mortgage rates by lenders as competition increases, alongside easing inflationary pressures and a still resilient labor market, has helped boost confidence among buyers and sellers. This has resulted in a positive start to the housing market in 2024.’

However, Kinnaird said affordability pressures remain as mortgage rates remain much higher than before the 2022 rate hike.

She added: ‘While housing activity has increased in recent months, interest rates remain high compared to the historic lows of recent years and demand continues to outstrip supply.

‘For those looking to buy a first home, the average deposit raised is now £53,414. Unsurprisingly, almost two-thirds of new buyers getting their foot on the ladder are now buying under a joint name.

‘Looking ahead, affordability challenges are likely to persist and further modest declines should not be ruled out, against the backdrop of broader uncertainty in the economic environment.’

Annual increase: After a fourth straight month of rising house prices, the annual growth rate is now 2.5%

According to real estate agents, the market is on the rise

Real estate agents widely report that Halifax’s numbers match what they see locally in the housing market.

Some even believe that home prices could rise sharply in some areas.

Simon Gerrard, director of Martyn Gerrard Estate Agents said: ‘Last year many people postponed their property search to weather the wider economic turbulence.

‘Now, however, the economy is starting to stabilise, and it is encouraging that major lenders are responding appropriately to inflation coming under control by cutting interest rates.

‘Although housing affordability is currently quite good, a rapidly growing population and a complete lack of new housing supply will mean that prices will subsequently rise sharply, especially in London.’

Jeremy Leaf, North London estate agent and former chairman of the Rics residence, added: ‘Our offices have seen more valuations, listings and most importantly viewings.’

Marc von Grundherr, director of Benham and Reeves, said: ‘The general view is that 2024 will be a much more fruitful year for the UK property market and we are already seeing the first signs of this, with a fourth consecutive monthly increase in house prices. and a sharp increase in both new sales offers and the number of buyers submitting offers.

“It’s really all systems go at the moment and as market activity continues to increase, property values ​​will continue to mature.”

Verona Frankish, managing director of online estate agent Yopa, also believes the housing market will continue to gain momentum as the year progresses.

“Looking ahead, it is likely that not only has the property market bottomed out in terms of last year’s decline in house prices, but it is also likely that interest rates have now peaked,” Frankish said.

“This combination of factors will excite both buyers and sellers equally and as the year progresses we expect even more momentum to build.”

Momentum building? Agents say they are seeing more activity in the housing market

Different housing markets

The average UK house price will not reflect everyone’s experience as the property market is made up of thousands of independent micro-markets.

Even looking at different UK regions, significant differences can be seen.

According to Halifax, Northern Ireland showed the strongest growth of all countries and regions in Great Britain. House prices there rose by 5.3 percent on an annual basis.

Scotland and Wales both saw positive growth of 4 percent year-on-year, according to Halifax.

Typical prices in the North West of England rose by 3.2 per cent, while Yorkshire and the Humber saw prices rise by 2.8 per cent.

Prices in the South East have fallen the most in the past month compared to other UK regions, with house sales down 2.3 per cent this time last year.

Although London still holds the top spot for the highest average house price across all regions, at £529,528, prices in the capital have fallen by 0.4 percent year-on-year.