Halifax: UK house prices continue to rise – will Budget dampen growth?
The Halifax has published its latest House Price Index, showing that UK house prices continue to rise – will Budget dampen growth?
House prices rose for the third consecutive month during September but growth is likely to remain modest, according to Halifax.
The latest Halifax House Price Index shows average UK house prices rose 0.3% on a monthly basis in September, up 4.7% annually.
This marked the fastest rate of house price growth since November 2022, putting average UK house prices at £293,399.
Northern Ireland continues to record the strongest property price growth of any nation or region in the UK, rising by 9.7% on an annual basis in September. The average price of a property in Northern Ireland is now £203,593.
House prices in Wales also recorded strong growth, up 4.4%, compared to the previous year, with properties now costing an average of £224,119.
Scotland saw a more modest rise in house prices, where a typical property now costs £205,718, 2.1% more than the year before.
The North-West once again recorded the strongest house price growth of any region in England, up 5.1% over the past year, to sit at £234,355.
London continues to have the most expensive property prices in the UK, now averaging £539,238, up 2.6% compared to last year. This is still some way below the capital’s peak property price of £552,592 set in August 2022, Halifax said.
Amanda Bryden, head of mortgages at Halifax, said:
“It’s essential to view these recent gains in context.
“While the typical property value has risen by around £13,000 over the past year, this increase is largely a recovery of the ground lost over the previous 12 months.
“Looking back two years, prices have increased by just 0.4%.
“Market conditions have steadily improved over the summer and into early autumn.
“Mortgage affordability has been easing thanks to strong wage growth and falling interest rates.
“This has boosted confidence among potential buyers, with the number of mortgages agreed up over 40% in the last year and now at their highest level since July 2022.
“While improved mortgage affordability should continue to support buyer activity – boosted by anticipated further cuts to interest rates – housing costs remain a challenge for many.
“As a result, we expect property price growth over the rest of this year and into next to remain modest.”
Sarah Coles, head of personal finance, Hargreaves Lansdown, suggested the market is still likely to struggle under the increasing weight of pricier properties, especially at a time when mortgage rates remain higher than many are used to, as well as Autumn Budget uncertainty.
Coles said:
“The fact that wages are outstripping house prices will help, but for an awful lot of buyers – including newcomers – it’s going to stretch affordability to breaking point.
“The market is also likely to be increasingly held back by a flood of active sellers too.
“Zoopla figures have shown that fears over potential capital gains tax rises in the Budget have persuaded more people to put rental and holiday homes on the market.
“It found that the number of properties up for sale has risen 12%, and that 13% of them were previously rented out.
“Coastal and rural homes were also hastily put up for sale, which is where so many holiday homes are based.
“It means that despite booming buyer demand, it will hold house price rises back eventually.”
Agents struck a more optimistic tone though.
Commenting on the index, Foxtons chief executive Guy Gittins said:
“Increased mortgage market certainty is allowing UK buyers to act with greater confidence and we’ve seen the rates available on many mortgage products continue to trend downwards since a hold on the base rate in September of last year.
“Not only has this helped to accelerate the rate of house price growth being seen across the UK property market, but we’re now seeing transactional volumes climb as these sales make it over the line.
“In fact, the latest government figures show that in August, the number of monthly transactions exceeded the 100,000 threshold for the first time since December 2022.
“A very positive sign indeed and a strong indication that the market is now returning to form.”
Nathan Emerson, chief executive at Propertymark, added:
“It is very welcome news to see yet further growth in the housing market and taking a wide-angle view of the year, there is no doubt consumers are now able to approach the buying and selling process with a far greater degree of confidence compared to the very start of the year.
“There is still further progress to be made, but with strong hints we may see further dips in the base rate before the year is out, we are seeing some lenders already confident enough to switch up their mortgage offerings which is proving very welcome news for borrowers.”
Kindly shared by Estate Agent Today
