UK house prices picked up in February from the previous month as recent reductions in mortgage rates helped to stabilise the market, according to the lender Halifax.
The average house price rose 1.1% to £285,476 last month compared with January, in a sign of resilience amid hopes the broader economic downturn will not be as severe as previously feared.
It followed a monthly gain in house prices of 0.2% in January and a fall of 1.3% in December, according to Halifax, which is part of Lloyds Banking Group. The annual growth rate remained at 2.1% for a third month.
“Recent reductions in mortgage rates, improving consumer confidence, and a continuing resilience in the labour market are arguably helping to stabilise prices following the falls seen in November and December,” Kim Kinnaird, the director of Halifax Mortgages, said.
House prices are down by about £8,500, or 2.9%, on the August peak but remain almost £9,000 above the average prices seen at the start of 2022 and are still above pre-pandemic levels, Kinnaird added. “With average house prices remaining high, housing affordability will continue to feel challenging for many buyers.”
Tom Bill, the head of UK residential research at the estate agents Knight Frank, said: “The UK housing market appears near the end of a long hangover from the mini-budget rather than on the verge of a price plunge. Activity stopped well before Christmas due to the mortgage market turmoil but has picked up this year as people come to terms with where rates are settling.
“That said, asking prices are likely to come under more pressure as we enter the traditionally busier spring market due to tighter affordability. We expect about half of the 20% increase seen during the pandemic to unwind but most evidence … points to a stronger market than expected.”
The Liz Truss government’s mini-budget in September drove mortgage rates sharply higher above 6%, but they have since fallen back to between 4% and 5%. The Bank of England has raised interest rates 10 times since December 2021 to 4% but the governor, Andrew Bailey, recently indicated they may have peaked.
Annual house price growth slowed in all countries and regions in February, Halifax said. The north-east posted the biggest slowdown, to an annual rate of 1.1% from 3.6%, with homes costing an average £163,953.
Average house prices in London are £526,842, down by 0.9% over the last year. The capital may be affected by its large proportion of flats, prices for which have broadly stagnated. Despite this slowdown, average prices are £240,000 more than the UK national level.
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Annual growth fell the least in Scotland, where the average property price is £198,779 (a growth rate of 2.2% compared with 2.3% in January).
In Wales, annual growth in February slowed to 1.2% from 1.9%, with homes costing £210,917 on average. Those buying a home in Northern Ireland will now pay £185,009 on average, an annual growth rate of 5.7%, down from 7%.
The new chief executive of the London estate agents Foxtons, Guy Gittins, said buyer activity was picking up, “which may result in a more favourable sales market in the latter part of the year”. However, he cautioned that the sharp drop in house sales after the mini-budget would be felt through most of 2023 because of the time needed to complete a transaction. Profits at Foxtons more than doubled to £11.9m last year as revenues grew 11% to £140m.
https://news.google.com/rss/articles/CBMiXWh0dHBzOi8vd3d3LnRoZWd1YXJkaWFuLmNvbS9tb25leS8yMDIzL21hci8wNy91ay1ob3VzZS1wcmljZXMtcmlzZS1tb3J0Z2FnZS1yYXRlLWN1dHMtaGFsaWZheNIBAA?oc=5
2023-03-07 09:32:00Z
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