UK house prices jump the quickest since 2022: Halifax
UK HOUSE prices rose at their strongest pace since the middle of 2022, as falling mortgage rates emboldened buyers to return to the market, one of the nation’s biggest mortgage lenders said.
Halifax said its measure of prices rose 1.3 per cent in the month of January alone and 2.5 per cent from a year ago, which was the strongest annual pace in a year.
The figures add to evidence that the housing market started the year on a firmer footing after a shallow dip in the middle of last year. Easing mortgage costs and improving confidence in the outlook for the economy have boosted the number of buyers looking for property.
“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,” Kim Kinnaird, director of Halifax Mortgages, said in a statement on Wednesday (Feb 7). “This has resulted in a positive start to 2024’s housing market.”
Nationwide Building Society, the other major lender collating house-price statistics, said last week that average values rose 0.7 per cent in January, the strongest reading in a year. By that measure, prices have fallen just 0.2 per cent in the past year.
Britain’s property market has held up much better than the 10 per cent or more drop that most economists were anticipating at the start of last year. That is due partly to a shortage of places on the market. Soaring rents have also made it more cost-effective to buy than lease a home.
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In a further sign that prices have bottomed out, two of the nation’s biggest homebuilders agreed on Wednesday to merge in a deal valued at £2.5 billion (S$4.2 billion). Barratt Developments agreed to buy rival Redrow in one the UK’s biggest-ever homebuilder acquisitions.
Halifax said prices have fallen just 0.7 per cent from their peak in mid-2022. The average home now costs £291,029, down from a peak of just over £293,000.
First-time buyers are now putting down average deposits of £53,414, which is about 19 per cent of the purchase price. Two-thirds of those new to the market buy in joint names.
“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,” Kinnaird said. BLOOMBERG
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