9:09 AM, 7th November 2023, About A year ago
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The UK’s house prices rose by 1.1% in October to end a six-month slump of price falls.
However, the Halifax house price index reveals that prices are still down by 3.2% in the year to September.
The average house is now worth £281,974 – which is £40,000 higher than before the pandemic.
Halifax says that prices are falling in all regions, but the largest drops are in South East England where prices are 6% lower, year-on-year.
The director of Halifax Mortgages, Kim Kinnaird, said: “On an annual basis, prices are down -3.2%, though the decline was at a slower pace than we saw in September (-4.5%).
“Prospective sellers appear to be taking a cautious attitude, leading to a low supply of homes for sale.
“This is likely to have strengthened prices in the short-term, rather than prices being driven by buyer demand, which remains weak overall.”
She added: “While many people will have seen their income grow through wage rises, higher interest rates and wider affordability pressures continue to be challenges for buyers.
“Across the medium-term, with financial markets not anticipating a decline in the Bank of England’s Base Rate soon, we expect house prices to fall further overall – with a return to growth from 2025.”
The head of personal finance at Hargreaves Lansdown, Sarah Coles, said: “House prices rose in October, for the first time in six months.
“This looks good on paper for sellers, but to get a higher price on your property, you have to flog it first, and that’s far easier said than done.
“House prices have proven fairly resilient. They’re down 3.2% in a year, but we’re still sitting on enormous gains since the onset of the pandemic.”
She adds: “And while prices are likely to drift further south in the coming months, they’re holding up impressively in the face of horrible pressure – actually rising in October.”
The chief executive of Foxtons, Guy Gittins, said: “While higher borrowing costs continue to present a challenge for the nation’s homebuyer, the property market remains ripe with opportunity for those who can overcome the initial hurdle of securing a mortgage offer and buyers and investors can still find good finance deals when working with a professional broker.
“The Bank of England’s decision to hold the base rate for a second consecutive time will only help to boost buyer confidence further and this increasing stability puts the property market in very good stead come January.”
The managing director of House Buyer Bureau, Chris Hodgkinson, said: “We may have seen the market take two steps backwards in recent months, but the latest figures suggest it has now taken one step forwards, with buyer confidence starting to grow once again.
“For those looking to sell, this means you may well be able to achieve that little bit more for your home.”
Yopa’s chief executive, Verona Frankish, said: “Today’s figures provide further proof that the property market has responded well to the Bank of England’s initial decision to freeze interest rates.
“With this remaining the case last week, we could well see a stronger finish to the year than many would have previously anticipated.”
Marc von Grundherr, a director of Benham and Reeves, said: “It’s looking like Christmas has come early for the nation’s homeowners, as the market appears to be making a late rally, buoyed by a heightened degree of buyer activity following the hold on interest rates.
“House prices remain lower on an annual basis, but it looks as though we have seen a stop to the rot that was materialising over the last six months.”
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