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House prices rise for fifth consecutive month: Halifax

Article by Rozi Jones in Financial Reporter Online

The average house price is now only around £1,800 below the peak seen in June 2022.

Average house prices rose by 0.4% in February, the fifth monthly rise in a row, according to the latest Halifax house price index.

Property prices grew by 1.7% on an annual basis, however this has slowed from 2.3% in January.

Northern Ireland is currently the strongest performing nation or region in the UK – house prices here increased by 5% on an annual basis. Properties in Northern Ireland now cost an average £195,956, which is £9,359 more than the same time in February 2023.

The North West saw positive growth of 4.4% on an annual basis to £232,128. The North East (4.2%) and Wales (4.1%) also recorded strong increases over the last year.

London continues to have the highest average house price across all of the regions, at £536,996. Prices in the capital have increased 1.5% and is the first positive annual growth seen since January 2023.

Properties in Eastern England fell the most last month, when compared to the rest of the UK’s nations and regions, with homes selling for an average of £329,927 (-0.8%), a drop of £2,794 since the same time in 2023.

Kim Kinnaird, director of Halifax Mortgages, said: “UK house prices rose for the fifth consecutive month in February, up by 0.4% or £1,091 in cash terms, with the average house price now £291,699.

“On an annual basis, house prices were 1.7% higher than a year ago, slowing from 2.3% in January. However, these figures continue to suggest a relatively stable start to 2024 and align with other promising signs of increased housing activity, such as mortgage approvals.

“In fact, the average price tag of a home is now only around £1,800 off the peak seen in June 2022. While it is encouraging that we’ve seen growth in recent months, what happens next remains uncertain. Although lower mortgage rates, alongside expectations of Bank of England interest rate cuts this year, should help buyer confidence in the short term, the downward trend on rates is showing signs of fading.

“Even with growing wages and inflation falling back, raising a deposit and affording a sizeable mortgage remains challenging, especially for those looking to join the property ladder, so it remains a possibility that there could be a slowdown in the housing market this year.”

Iain McKenzie, CEO of The Guild of Property Professionals, commented: “The property industry is benefitting from a renewed sense of confidence among buyers that now is still a good time to purchase their next home.

“Inflation is coming down from its peak last year and better mortgage deals are popping up from lenders.

“Concerns of affordability still remain and household budgets are squeezed. Any improvement in house price growth should always be tempered by understanding this does make it more difficult for buyers to get themselves on the ladder.

“It was disappointing to see no new incentives for first-time buyers in the Spring Budget. In the run up to the announcement we were hoping to see a 99% mortgage scheme, or an updated version of the help-to-buy initiative, but we were left wanting more.

“The cut to capital gains tax could have the potential benefit of easing the shortage of housing stock that persists in many areas of the country. Landlords looking to market their property for sale and benefit from the tax cut could bring more available homes onto the market.”

Nicky Stevenson, managing director at national estate agent Fine & Country, added: “House prices ticked up for the second month of 2024, and activity in the property market is building up nicely in time for one of the busiest times of year.

“Mortgage approvals are at their highest levels since October 2022, suggesting there is pent-up demand from buyers who had been delaying a move.

“It will be interesting to see whether the Chancellor’s capital gains tax cut announcement in the Budget encourages teetering landlords to sell their properties.

“A rush of new listings would inject more energy into the housing market and may reignite demand from first-time buyers who have been struggling to afford a home in this high interest rate environment.

“With the base rate stuck at 5.25%, pricing realistically remains important, especially to sellers who want to move quickly.”


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