House prices hit highest level since October 2022

UK house prices

Average house prices rose to £291,029 in January, which was £3,900 more than last month, according to Halifax house price index

UK house prices rose for the fourth successive month in January to the highest level since October 2022 as declining mortgage rates boosted the market.

Average house prices rose to £291,029 in January, which was £3,900 more than last month, per Halifax house price index.

The survey showed that property values rose by 1.3% in January compared to the previous month.

Compared to the same month last year, property prices increased by 2.5%, which was the highest annual growth since January 2023.

It was the fourth consecutive monthly gain after six successive declines before that.

Halifax mortgage director, Kim Kinnaird, said: The recent reduction of mortgage rates from lenders as competition picks up, apart from fading inflationary pressures and a still-resilient labour market has contributed to higher confidence among buyers and sellers. This has resulted in a positive start to the housing market in 2024.

However, while housing activity has increased over recent months, interest rates remain higher compared to the historic lows seen in recent years and demand continues to outpace supply. For those looking to buy a first home, the average deposit raised is now £53,414, nearly 19% of the purchase price. It is not surprising that almost two thirds (63%) of new buyers getting a foot on the ladder are now buying in joint names, Kinnaird added.

In London, the average price was 0.4% lower year-on-year at £529,528, bucking the wider trend of growth.

Northern Ireland recorded the strongest growth across all the UK regions – house prices here rose 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 last year.

Scotland and Wales both saw 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 past year.

The South East dropped the most last month when compared to other UK regions, with homes selling for an average £379,220 (-2.3%), a drop of £8,866.

Alice Haine, personal finance analyst at Bestinvest by Evelyn Partners, the wealth manager, said: Interest rates have remained on pause at a 16-year peak of 5.25% since August 2023 and, with inflation expected to drop rapidly in the coming months, reductions are expected as soon as the summer.

She added: The improving outlook has resulted in better mortgage rates and affordability levels for FTBs and those looking to refinance.

Disclaimer: The opinions expressed by our writers are their own and do not represent the views of Invest for Property. The information provided on Invest for Property is intended for informational purposes only. Invest for Property is not liable for any financial losses incurred. Conduct your own research by contacting financial experts before making any investment decisions.

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