In November, Halifax reported a significant increase in the average house prices in the UK for the second consecutive month.
The surge amounted to nearly £1,400 on a monthly basis with property values rising by 0.5%.
This follows a previous increase of 1.2% in October. Despite a 1.0% year-on-year decrease, the average house price in November stood at £283,615.
Resilient Property Prices
Despite prevailing economic headwinds, UK property prices have displayed remarkable resilience throughout 2023. The annual decrease of 1.0% remains modest, with prices still £40,000 higher than pre-pandemic levels. This resilience can be attributed to a shortage of available properties rather than a substantial surge in buyer demand.
Factors Driving the Market
Recent data on mortgage approvals indicates a slight uptick in activity levels, potentially fueled by improved affordability for homebuyers. As mortgage rates begin to ease, buyer confidence is growing, encouraging more people to proceed with their home purchases. However, it’s important to note that the uncertain economic conditions make it challenging to predict the sustainability of market activity.
The report from Halifax also highlighted significant regional variations in house prices. In the South East of England, property values experienced a notable drop of 5.7% (£22,702) over the past year. Meanwhile, the East Midlands saw a decrease of 4.4%, and Eastern England experienced a decline of 5.0%. London witnessed a 3.8% drop, with the average house price at £524,592.
Experts in the field have expressed mixed opinions regarding the current state of the housing market. While some believe that recent positive economic data and lower mortgage rates have buoyed sentiment, others warn that stability in the market may be short-lived. Factors such as interest rate hikes and inflation could potentially weaken house prices in the coming year.
Outlook and Predictions
Looking ahead, it is anticipated that the housing market will continue to favor buyers in 2024, particularly in the first half of the year. The scarcity of housing stock is likely to support prices, but the impact of the upcoming general election may result in slower overall market activity. Moreover, the drag effect from the Bank of England’s interest rate hikes could further exacerbate the lack of available properties.
Halifax’s report highlights a positive trend in the average UK house prices, driven by a shortage of available properties and increased buyer confidence. However, uncertainties in the economic landscape and potential downward pressures suggest that the sustainability of this growth remains uncertain. It will be crucial to closely monitor market conditions and factors such as inflation, employment rates, and affordability to assess their impact on house prices in the future.