According to the latest figures from Halifax, one of the country’s leading mortgage providers, UK house prices have risen for the fourth month in a row this January, reaching levels not seen since October 2022. This consecutive rise marks a hopeful sign of stabilisation in the housing sector, buoyed by easing mortgage rates and a resilient economic backdrop.
A Surge in Prices
The statistics reveal a significant uptick in the average UK house price, which saw a 1.3% increase from December to January. This jump is the most rapid monthly growth recorded since June 2022, propelling the average house price to a striking £291,029. When looking at the year-on-year comparison, prices have ascended by 2.5%, showcasing the fastest annual growth rate in the past 12 months.
Signs of Recovery
This recent data underscores a burgeoning recovery in the property market, which had previously felt the squeeze from rising borrowing costs. The Bank of England’s decision to incrementally increase interest rates starting December 2021 had dampened demand, but the current climate suggests a turnaround. With expectations of a rate cut from the central bank’s 16-year peak of 5.25%, mortgage rates on popular fixed deals have seen a downward trend since the summer, instilling renewed confidence among buyers and sellers.
Market Confidence on the Rise
Kim Kinnaird, a director at Halifax Mortgages, attributes this renewed market optimism to several factors. The recent dip in mortgage rates, spurred by increased lender competition, alongside diminishing inflationary pressures and a robust employment landscape, has kick-started 2024 on a high note for the housing market. This sentiment is echoed by Stephen Perkins, managing director at Yellow Brick Mortgages, who notes a significant uptick in activity and inquiries from prospective buyers, buoyed by the more favourable mortgage rate outlook.
Nationwide Trends and Regional Variations
This upward trend in house prices is not isolated to Halifax’s findings. Nationwide, another key player in the mortgage lending space, reported a 0.7% month-on-month increase in house prices for January. However, the recovery landscape is not uniform across the UK. While most regions have seen year-on-year price increases, with Northern Ireland leading the charge at 5.3%, London and the South East have experienced slight declines.
Looking Ahead
The easing of mortgage rates, coupled with an increase in both buyer interest and property listings, suggests a positive trajectory for the UK housing market. Experts like Tom Bill, head of UK residential research at Knight Frank, predict that this resurgence in demand and activity will likely translate into modest single-digit price growth over the year.