UK house prices post first rise in four months
UK HOUSE prices rose for the first time in four months at the end of 2023, according to official data that affirms recent industry surveys pointing to the property market turning the corner.
The average price of a home rose to £284,691 (S$482,285) in December, a 0.1 per cent rise compared to the previous month, the Office for National Statistics (ONS) said on Wednesday (Feb 14), citing Land Registry records.
The figures suggest the housing market may be past the worst after a marked cooling in mortgage rates in recent months. More forward-looking industry data from lenders Halifax and Nationwide Building Society have already pointed to prices rebounding.
The ONS said prices fell 1.4 per cent in the 12 months to December, with the market defying predictions of a slump triggered by 14 back-to-back interest-rate rises by the Bank of England (BOE). It was still the worst year for the property market since 2008 when the financial crisis triggered a 15 per cent decline. Prices in London were down almost 5 per cent year on year in 2023.
“December saw demand pick up as mortgage rates decreased and 2024 has started with a tsunami of enthusiasm and enquiries from potential homebuyers,” said Stephen Perkins, managing director at broker Yellow Brick Mortgages.
“Though this data shows prices are down on an annual basis, it paints a picture of how the market was several months previously, and the picture now is really quite different.”
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Buyers have been tempted back to the market by cheaper borrowing costs after the central bank halted its hiking cycle and speculation mounted over rate cuts in 2024. BOE data has shown mortgage approvals steadily picking up in the final three months of 2023, while a survey of estate agents has indicated rebounding buyer demand and improving sales.
According to Moneyfacts, the average two-year fixed mortgage rate has fallen to 5.63 per cent. That is down from a peak of almost 7 per cent last year but still well above levels before inflation took off.
“Our latest figures also show a return to annual price growth for two English regions: the North West and West Midlands,” said Aimee North, head of housing market indices at the ONS.
Separately, the ONS said that private rental price inflation in London picked up to 6.9 per cent in the 12 months to January, matching the previous record high. UK-wide private rents rose by 6.2 per cent year on year, unchanged from December. BLOOMBERG
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