The average house price rose by 1.3 percent in January, marking the fourth monthly rise in a row, according to Halifax. Annually, property values increased by 2.5 percent – the highest annual growth since January 2023.
A typical UK home now costs £291,029, over £3,900 more than December.
But this trend isn’t consistent across the board, with areas such as the South East continuing to see downward pressure on prices. Homes in this region are now selling for an average of £379,220 (-2.3 percent), a drop of £8,866. This marks the largest decline in prices among all UK regions.
London retains the top spot for the highest average house price across all the regions, at £529,528, albeit prices in the capital have also declined by -0.4 percent on an annual basis.
Kim Kinnaird, Director, Halifax Mortgages, said: “The average house price in January was £291,029, up +1.3 percent or, in cash terms, £3,924 compared to December 2023.
“This is the fourth consecutive month that house prices have risen and, as a result, the pace of annual growth is now +2.5 percent, the highest rate since January last year.”
Ms Kinnaird noted that the recent decrease in mortgage rates by lenders, driven by increased competition, combined with fading inflationary pressures and a resilient labor market, has bolstered confidence among both buyers and sellers.
She added: “This has resulted in a positive start to 2024’s housing market.”
However, she noted: “While housing activity has increased over recent months, interest rates remain elevated compared to the historic lows seen in recent years and demand continues to exceed supply.
“For those looking to buy a first home, the average deposit raised is now £53,414, around 19 percent of the purchase price. It’s not surprising that almost two thirds (63 percent) of new buyers getting a foot on the ladder are now buying in joint names.
“Looking ahead, affordability challenges are likely to remain and further modest falls should not be ruled out, against a backdrop of broader uncertainty in the economic environment.”
Regional house prices
According to the Halifax House Price Index, Northern Ireland recorded the strongest growth across all the nations or regions within the UK. House prices here increased by +5.3 percent on an annual basis. Properties in Northern Ireland now cost on average £195,760, which is £9,761 higher than the same time in January 2023.
Scotland and Wales also saw positive growth, +4 percent on an annual basis to £206,087 and £219,609, respectively. North West (+3.2 percent), Yorkshire and Humber (+2.8 percent), North East (+2.0 percent) and East Midlands (0.5 percent) also recorded house price increases over the last year.
Meanwhile, the South East and London saw prices fall over the last year by -2.3 percent and -0.4 percent, respectively.
Marc von Grundherr, director of Benham and Reeves, commented: “The general view is that 2024 will be a far more fruitful year for the UK property market. We’re already seeing early signs of this, with a fourth consecutive monthly increase in house prices and a sharp increase in both new sales listings and the number of buyers submitting offers.
“It really is all systems go at the moment and as market activity continues to build, property values will continue to ripen.”
Ruth Beeton, co-founder of Home Sale Pack, added: “Despite interest rates remaining at their highest since 2008, mortgage approvals and mortgage approved house prices are on the up and this uplift in market activity is being largely driven by those looking to remortgage while rates have settled.
“Bank of England data shows that mortgage approvals attributed to remortgagers have increased by 15 percent per month on average since they started to climb in October of last year, more than any other buyer segment.
“Of course, with both the cost of borrowing and house prices remaining far higher than historical levels, the nation’s first-time buyers continue to struggle with their aspirations of homeownership.”
That said, Ms Beeton noted: “There have been whispers that the Government could be looking to supercharge first-time buyer demand yet again, which would help rebalance the market and help to further stimulate house price growth over the year ahead.”