Lender also predicts price movement in 2024
The average house price in the UK rose for a third consecutive month in December, climbing by 1.1% to £287,105, according to data from Halifax.
The latest rise places prices at their highest level since March 2023, with the annual growth for 2023 hitting +1.7%, reflecting an average property price increase of £4,800 compared to December 2022.
Kim Kinnaird, director at Halifax Mortgages, noted that while the final quarter of 2023 exhibited growth, the preceding six months saw a consistent decline in property prices. She added that the growth recently seen can be attributed to a scarcity of available properties rather than heightened buyer demand, and that the positive trend may be influenced by easing mortgage rates, potentially boosting buyer confidence in the coming months.
Also commenting on the latest Halifax House Price Index, Alan Davison, director of customer sales at Together, said today’s rise in house prices will be a welcome change for many, offering hope that the weak buyer demand seen last year will start to improve steadily as 2024 activity picks up.
For Jonathan Samuels, chief executive at of Octane Capital, a freeze on interest rates has certainly helped to steady the ship.
“Not only have we seen mortgage approvals start to climb, but house prices are now starting to follow suit,” he noted. “With the base rate remaining at its highest since 2008, we’re not yet out of the woods, but we can now see the light through the trees, and it’s difficult to anticipate anything other than further positivity on the horizon in 2024.”
Davison, meanwhile, pointed out that that with housing secretary Michael Gove promising more help for first-time buyers before the possible general election, there could be more aspiring homebuyers taking their first steps on to the housing ladder this year.
“Where mortgage rates track as we move into 2024 will dictate what the majority of buyers and sellers in both the residential and commercial sides do next,” he pointed out. “There are opportunities for those willing to take them; first time buyers in particular, can take advantage of schemes like shared ownership and Right to Buy to achieve their property ambitions this year.”
Looking ahead to 2024, Halifax forecasts a potential decrease in house prices ranging between -2% and -4%, reflecting the broader economic uncertainty.
“As we move through 2024, the UK property market will continue to reflect the wider economic uncertainty, and buyers and sellers are likely to be naturally cautious when considering making a move,” Kinnaird said.
“While wage growth is now above inflation, helping to ease cost-of-living pressures for some and improving housing affordability, interest rates are likely to remain elevated for as long as inflation remains markedly above the Bank of England’s target.
“Our latest forecast suggests house prices could fall between -2% and -4% during the coming year, although, as with recent years, forecast uncertainty remains high given the current economic climate.”
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