Halifax: Prices surge to new record as buyers still going strong in November

Sarah Coles, head of personal finance at Hargreaves Lansdown, comments on the Halifax November House Price Index, showing prices surge to new record as buyers still going strong in November.

Key points from publication:

• • The average house cost £298,083 in November: a new record high.
  • House prices rose 1.3% in November and are up 4.8% in a year.

Sarah Coles said:

“Buyers didn’t get the memo that they’re meant to be in hibernation right now, because properties are still selling, and price rises have accelerated slightly.

“They rose faster than had been expected, and while they’re not racing away at breakneck speed, since the first interest rate cut, they’ve been slowly making their way to another new high.

“The busy market has also been supported by buyers getting in on the act – particularly those with more than one property, who’ve been convinced that the tax situation isn’t going to get any easier in the next few years, so they may as well get out while the going is good.

“The market isn’t set to hit pause for a prolonged period around the festivities this December either, because the Bank of England figures show mortgage approvals in October hit their highest level for more than two years, which usually indicates that the following two or three months will be busier.

“This will owe something to the fact that buyers can see the end of the stamp duty holiday looming into view at the end of next March.

“We’re likely to see plenty of buyers rushing to complete purchases before the window of opportunity slams shut again.

“There’s a chance we’ll see some enthusiasm ebb from the market when the stamp duty holiday ends.

“Buyers are already facing challenges, not least with affordability.

“The sheer cost of homes is likely to be pricing people out, especially given that mortgage rates remain relatively high.

“Rates have actually risen very slightly from a month ago, and while they’re not facing alarming hikes, they’re not falling as many people will have hoped after two Bank of England rate cuts.

“Wages have been rising faster than inflation since property prices hit their pandemic highs, which will have eased finances slightly, but it’s still a huge ask for people to stretch onto the property ladder.

£It means that for those who are keen to buy, their deposit will make an enormous amount of difference.

“Recent government data showed that the average first-time buyer had a deposit of £55,372, and when you’re faced with this kind of target it’s vital to get help from wherever you can.

“Almost a third of first-time buyers had support from the Bank of Mum and Dad, but this isn’t enough on its own – 85% paid for at least some of the deposit with savings.

“When you’re carefully salting away money for a property purchase, it’s vital to consider the Lifetime ISA.

“This has been building momentum in recent years, and in 2022/23 (the last year we have data for), the amount paid into LISAs was up 10%.

“If you’re aged 18-39 and have at least a year until you plan to buy, you can put up to £4,000 a year into a LISA, and the government will top it up by 25% – or up to £1,000 a year.

“If you aren’t planning to buy for 5-10 years, you can also choose a stocks and shares LISA, which has better growth potential than a cash ISA – which could help you get closer to your goal.”

Kindly shared by Hargreaves Lansdown