House prices ticked up slightly in March with average property adding £2,000, says Halifax
House prices rose slightly in March, with average property adding £2,000, but Halifax warns of a ‘continued slowdown’ this year
- The median house price in the UK is now £287,990, according to Halifax
- All countries and regions in the UK saw house prices rise in March 2023
- But it expects to see a “sustained slowdown” throughout this year
According to Halifax, the housing marker shows “resilience” as prices continue to rise moderately despite the economic headwind of high inflation and interest rates.
However, the lender warned of a “continued slowdown” in price growth this year as mortgage rates are unlikely to fall substantially.
Typical property now costs £287,990, it said, up 0.8 per cent or £2,200 from last month but down 2 per cent from its August peak.
Annual prices rose by 1.6 percent in March, compared to 2.1 percent in the previous three months.
In addition, house prices rose in all UK countries and regions last month.
The median house price in the UK is now £287,990, up £2,200 from last month
Kim Kinnaird, director of Halifax Mortgages, said: “Overall, these latest figures continue to point to relative stability in the housing market at the start of 2023 and are consistent with many other recent industry surveys and data.
“This has been marked by a partial recovery in activity and transactions, especially compared to the significant declines late last year, with the latest data from the Bank of England showing mortgage approvals rising for the first time in six months.”
Kinniard said lower mortgage rates in the first few months of this year were the driving factor behind the improved picture, with “the sudden spike in borrowing costs we saw in November and December now largely reversed.”
In October, average fixed rates peaked at 6.65 for a five-year period and 6.52 for a two-year period. Five-year fixed rate agreements now average 5.04 percent, according to Moneyfacts. The average two-year fixed interest rate is now 5.35 percent.
It means that someone who takes out a new £200,000 mortgage over 25 years today, with a fixed two-year deal, will typically pay £143 less per month compared to someone who takes out a mortgage in October.
The most recent figures from the Bank of England show that the number of mortgages approved for home purchases increased by 9.8% in February 2023 compared to the previous month, to 43,536.
House price growth remained positive in March, but has slowed compared to previous months
Regionally, Northern Ireland continues to report the strongest annual house price growth of 4.9 per cent, with an average house price of £186,459. It is followed by the West Midlands where prices rose by 3.8 per cent with an average property price of £248,308.
However, Kinniard says Halifax expects “a continued slowdown in growth this year.”
“While the path for interest rates is uncertain, mortgage costs are unlikely to become significantly cheaper in the near term and housing market performance will continue to reflect these new norms of higher borrowing costs and lower demand,” she added.