"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"
- Kim Kinnaird - Halifax
Average house prices rose by 1.3% in January, the fourth monthly rise in a row according to this morning's report from Halifax.
On the year, annual growth was at +2.5%, the highest level since January 2023 and sees the price of a typical UK home now costing £291,029, over £3,900 more than last month.
National and regional breakdown
Northern Ireland recorded the strongest growth across all the nations or regions within the UK - house prices here increased by +5.3% 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 both saw positive growth, +4% on an annual basis to £206,087 and £219,609 respectively. North West (+3.2%), Yorkshire and Humber (+2.8%), North East (+2.0%) and East Midlands (0.5%) also recorded house price increases over the last year.
The South East fell the most last month when compared to other UK regions, with homes selling for an average of £379,220 (-2.3%), a drop of £8,866.
London retains the top spot for the highest average house price across all the regions, at £529,528, albeit prices in the capital have declined by -0.4% on an annual basis.
Kim Kinnaird, Director, Halifax Mortgages, said: “The average house price in January was £291,029, up +1.3% 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%, the highest rate since January last year.
“The recent reduction of mortgage rates from lenders as competition picks up, alongside fading inflationary pressures and a still-resilient labour market has contributed to increased confidence among buyers and sellers. This has resulted in a positive start to 2024’s housing market.
“However, 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% of the purchase price. It’s not surprising that almost two-thirds (63%) 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.”
Tom Bill, head of UK residential research at Knight Frank said: “After suffering the effects of 14 consecutive rate rises last year, house prices are getting stronger as multiple interest rate cuts are expected in 2024.
"The number of new buyers registering and offers being submitted has increased since lenders dropped their prices last month, which suggests demand and activity levels will only get stronger, leading to a modest single-digit price increase this year.”
Nathan Emerson CEO at Propertymark comments: “It is positive to see that house prices have gone up gradually, especially as borrowing costs are being affected by higher interest rates on mortgage affordability.
"Before 2023 ended, the Bank of England's decision to maintain interest rates should be providing further confidence to buyers looking to make their next or first home move in 2024. We would now hope that the Bank of England gradually starts slashing interest rates in order to further stimulate growth in the housing market."
Iain McKenzie, CEO of The Guild of Property Professionals, comments: “This is our first indicator for how 2024 will play out for the property industry and all signs point to a healthy start.
“A monthly increase of over 1% in house prices will be welcome news to homeowners who are considering selling their property this year.
“While prospective buyers will be hoping for a greater adjustment in prices, they should also feel reassured by a robust market, as it means their home is more likely to hold its value after they’ve already agreed to purchase.
“Estate agents are seeing that the demand for quality housing remains as robust as ever. Millions of first-time buyers are currently trapped in a rental market which is becoming increasingly unaffordable, especially in the bigger cities.
“Interest rates are holding steady, which is giving lenders the motivation to approve more mortgage enquiries. This is welcome news to the industry and we should see sales pick up this year too.
“If you are looking at marketing your property this year, your local estate agent is likely to have the best idea of prices in your part of the country. We have seen such wildly different trends across the UK over the past year, so a local perspective is crucial in securing the best price possible.”
Matt Thompson, head of sales at Chestertons, says: “The gradual introduction of more attractive mortgage products boosted buyer confidence in January, resulting in more buyers entering the market.
"This increase in activity was further driven by pent-up demand from house hunters who were unable to find a property last year. Sellers also feel more confident about attracting the right buyer for their home which led to a slight increase in the number of properties being put up for sale in January.”