House price growth softens in January: Halifax


House prices went up 1.9% on an annual basis this January, according to a new report from Halifax.

And on a monthly basis, house prices failed to move at all. These figures mean that the average house price now comes in at £281,684.

In December 2022, Halifax noted a 2% annual rise.

January’s 1.9% annual rise is the lowest level of growth seen by the bank in over three years, says Halifax Mortgages director Kim Kinnaird.

She adds: “We expected that the squeeze on household incomes from the rising cost of living and higher interest rates would lead to a slower housing market, particularly compared to the rapid growth of recent years.

“As we move through 2023, that trend is likely to continue as higher borrowing costs lead to reduced demand.”

Meanwhile, Fine & Country managing director Nicky Stevenson says: “A month without a fall in house prices brings some much-needed stability to the property market, and will likely encourage more sellers to put their homes up for sale ahead of the traditionally busy springtime.”

And Quilter mortgage expert Karen Noye comments: “House prices… have remained stable after a few months of falling according to Halifax this morning. This may be because mortgage interest rates have gradually started to climb down from their peak following Liz Truss’ infamous mini-Budget.

“While we are still far from out of the woods, with the Bank of England still likely to raise rates again to curb inflation, we feel in a more predictable time. Predictability helps to drive demand up in the housing market but that is weighed against severe personal financial strain. Therefore, a stagnating or slowly dropping housing market is to be expected for the time being.

“This more forecastable environment is illustrated by the fact that in the run up to the last interest rate decision despite it being heavily rumoured that the base rate was likely to rise, many lenders continued to cut rates on their fixed products and tighten margins on their tracker rates. Commercial competitiveness is now driving a price war that the lenders are happier to be a part of considering they have a better idea of where interest rates will end up.

“Although there have been damming predictions about the UK economy in comparison to its peers by the likes of the International Monetary Fund, if there is only a very shallow recession, we should start to see house prices rebound as interest rates fall once the spectre of inflation has gone.

“It will still take some time but its likely house prices will be on an upward trajectory as and when people’s personal finances have recovered from the current shock.”

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