According to data from the mortgage lender Halifax on Tuesday, it is the first month-on-month rise in prices in seven months
UK’s housing market is shaking off forecasts for a crash, with a plunge in the number of properties changing hands preventing a sizeable decline in prices.
A standoff between buyers and sellers has dried up housing transactions but also limited any slump in valuations, with few households compelled into selling up.
According to data from the mortgage lender Halifax on Tuesday, it is the first month-on-month rise in prices in seven months. That added to evidence that the market is stabilising after a drop many had expected to turn into a sizeable correction. While analysts forecasted a 10 per cent decline in prices from the peak in summer 2022, the slide so far is only half of that level and well short of the most apocalyptic forecasts.
Halifax said a lack of houses for sale helped deliver the biggest monthly price gain since February. There are other factors supporting the market. The BOE’s decision to stop its quickest series of interest rate hikes in more than three decades eased upward pressure on mortgage rates, while low unemployment and lender forbearance headed off the risk of forced sales.
The high cost of borrowing alone is not enough to trigger the leg down we forecasted, said Andrew Wishart, senior property economist at Capital Economics. He sees the data as “confirmation house prices have stopped falling” and expects little change in 2024.
Tom Bill, head of UK residential research at Knight Frank, said “thin trading” means monthly price movements should be handled with care. House prices will continue to come under pressure, but we think they will bottom out in 2024. We expect a drop of 7 per cent this year and 4 per cent in 2024.