UK house prices bounce back in January, Halifax data shows
It follows a 0.5% fall in prices in December
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[LONDON] British house prices rose by 0.7 per cent in January, mortgage lender Halifax said on Friday (Feb 6), adding to signs of a recovery in the housing market after Finance Minister Rachel Reeves’ Budget in late November.
The month-on-month increase followed a 0.5 per cent fall in prices in December.
Compared with the same year-ago period, house prices rose by 1 per cent, speeding up from December’s 0.4 per cent growth and taking the average cost of property prices above £300,000 (S$518,763) for the first time, Halifax said.
“While that’s undoubtedly a milestone figure, and activity levels show a resilient market, affordability remains a challenge for many would-be buyers,” Amanda Bryden, Halifax’s head of mortgages, said.
But Bryden noted the sector was showing signs of improvement, and further easing in inflation could lead to gradual reductions in mortgage costs.
“Wage growth has been outpacing property price inflation since late 2022, steadily improving underlying affordability. That’s a positive trend for buyers and the long-term health of the market,” she added.
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Another lender, Nationwide Building Society, said on Monday its measure of house prices rose by 1 per cent in annual terms in January, while its estimate of monthly house prices grew by 0.3 per cent.
The Royal Institution of Chartered Surveyors said in January that the housing market showed some signs of turning a corner, as uncertainty about Reeves’ Budget and her tax plans lifted.
However, Bank of England data has shown that the number of mortgages approved by lenders – a leading indicator for house purchases – fell in December to its lowest since June 2024.
The central bank held interest rates at 3.75 per cent on Thursday but signalled further reductions ahead if an expected fall in inflation looks like it will last. Investors are almost fully pricing in two more quarter-point rate cuts in 2026.
Halifax said it continued to expect annual house price growth of 1 to 3 per cent in 2026. REUTERS
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