8:42 AM, 7th March 2024, About 10 months ago
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UK house prices have risen for the fifth consecutive month, rising by 0.4% in February, Halifax reveals.
The rise is equivalent to £1,091 in cash terms and the average house price is now £291,699.
House prices are 1.7% higher than a year ago, although this growth has slowed from 2.3% in January.
However, the average price is now just £1,800 off June 2022’s peak.
The director of Halifax Mortgages, Kim Kinnaird, said: “These figures continue to suggest a relatively stable start to 2024 and align with other promising signs of increased housing activity, such as mortgage approvals.
“While it is encouraging that we’ve seen growth in recent months, what happens next remains uncertain.
“Although lower mortgage rates, alongside expectations of Bank of England interest rate cuts this year, should help buyer confidence in the short term, the downward trend on rates is showing signs of fading.”
She added: “Even with growing wages and inflation falling back, raising a deposit and affording a sizeable mortgage remains challenging, especially for those looking to join the property ladder, so it remains a possibility that there could be a slowdown in the housing market this year.”
The head of personal finance at Hargreaves Lansdown, Sarah Coles, said: “The power of momentum has helped keep house prices rising into February. It’s a slower rise than January, as mortgage rate cuts eased, and there’s every chance this could peter out in the face of higher rates.
“However, after five months of house price growth, optimism is building that this could be the new normal.”
She adds: “February brought market concerns that the Bank of England wouldn’t cut rates as fast as it hoped, so banks factored in higher rates for longer, and by the end of the month, this meant the average two-year mortgage rate rose to 5.75%
“Mortgage changes have a lag effect on demand, because those approved in January will tend to fund the sales in February, and to a certain extent in March, but their impact will diminish over time. This may be what we’re seeing in the figures.”
Tom Brown, the managing director of real estate at Ingenious, said: “Nationally, there remains a significant shortage of housing inventory across most locations and price points. Consequently, any slow-down in sales volumes from homeowners is likely to be offset by increased demand from renters and investors.
“However, it’s essential to note that the situation is not uniform throughout the country and across all price ranges. When analysing opportunities, it is key to understand the underlying subsectors and regional dynamics.”
Jeremy Leaf, a north London estate agent and former RICS residential chairman, says: “While there is often an over-concentration on house prices, when it comes to the health of the housing market, prices impact buyer and seller confidence.
“Rising prices, while not good for those trying to get on the ladder, seem to suggest that the market is picking up, although transactions and affordability, which are most stretched in higher value areas such as London, are arguably more relevant.”
Mark Harris, the chief executive of mortgage broker SPF Private Clients, said: “Brokers are finding that activity levels continue to improve, as buyers and sellers expect the next move in interest rates to be downwards, which has made them more willing to get on with their moves.
“However, the flurry of mortgage rate reductions has slowed, with a number of lenders increasing their ‘best buy’ rates again.”
