Market grinds to a halt – prices up barely 2% in a year: Halifax

Helen Morrissey, senior pensions and retirement analyst at Hargreaves Lansdown, comments on the Halifax House Price Index, which shows the market grinds to a halt with prices up barely 2% in a year.

Key points from publication:
    • Typical UK property now costs £281,684. This compares to £281,713 last month.
    • Follows falls in December (-1.3%) and November (-2.4%)
    • Annual rate of house price growth slowed to +1.9% from +2.1% in December.
    • Lower house prices and interest rates peaking at a lower level than first anticipated could improve affordability in the coming months.
Helen Morrissey says:

“House prices stabilised in January after two months of falls, as the market grinds to a halt.

“Annual house price growth has slowed right down and is now just 1.9% – the consensus of data from around the market seems to suggest we will soon be seeing annual price falls.

“It’s been a turbulent time for the property market with soaring inflation putting pressure on our finances while the turmoil caused by the mini-Budget sent buyers running for the hills.

“It looks like the pain may not be over yet, because the RICS survey results show demand continues to fall, while Bank of England figures reveal mortgage demand has dropped as low as when the market was effectively closed at the start of the pandemic.

“We are starting to see mortgage rates come down, but it may not be enough to tempt many would-be buyers into the market just yet.

“The data did point to a glimmer of hope for buyers though. A mixture of falling house prices with interest rates peaking at a lower level than first thought will improve affordability.

“Added to this the Bank of England recently said it did not expect the incoming recession to be as long or as deep as initially feared which will ease concerns about potential redundancies and so we could see more people looking to get a step on the housing ladder in the coming months.”

 

Kindly shared by Hargreaves Lansdown

Main article photo courtesy of Pixabay