The lates Halifax House Price Index shows that average house prices rose by 0.5% in November, following a rise of 1.2% in October.
Property prices dropped by 1% on an annual basis (vs 3.1% last month). A typical UK home now costs £283,615, around £1,300 more than last month.
South-east England has continued to see most downward pressure on house prices
Commenting on the latest figures Halifax Mortgages director Kim Kinnaird said: “The resilience seen in house prices during 2023 continues to be underpinned by a shortage of properties available, rather than any significant strengthening of buyer demand. That said, recent figures for mortgage approvals suggest a slight uptick in activity levels, which is likely as a result of an improving picture on affordability for homebuyers”.
Kinnaird goes on to suggest that with mortgage rates starting to ease slightly, this may be leading to increased buyer confidence, seeing people more inclined to push ahead with their home purchases.
“However, the economic conditions remain uncertain, making it hard to assess the extent to which market activity will be maintained. Other pressures – like inflation, the broader cost of living, overall employment rates and affordability – mean we expect to see downward pressure on house prices into next year.”
MT Finance managing director Gareth Lewis sees nothing out of the ordinary in this latest data but signs of ‘business as usual’ for the market.
“While there is a slight uptick in prices this shouldn’t be regarded through rose-tinted glasses, as while transactional volumes remain low, we are possibly not seeing the true reflection that increased rates and the cost of living are having on what buyers are willing to pay”.
He adds: “We can already see a reasonable downwards trend being set in the South East, with regional fluctuations becoming more relevant as we move forwards.”
Quilter mortgage expert Karen Noye suggests the statistics point to a market that’s cautiously threading its way towards stability.
“The 0.5% rise in November, as shown by Halifax this morning, is a small yet telling step in a market that has witnessed a modest annual downturn of 1% but could have suffered much more considering the economic backdrop.
“This slight increase, emerging amidst a tangle of economic uncertainties, points to a potential growing resilience within the housing sector although its likely underpinned by a seriously lack of housing stock”.
However, she stresses that mortgage approvals, are on a upwards trajectory, albeit at a measured pace. “The Bank of England’s latest data reveals a budding increase in approvals, painting a picture of cautious optimism among potential homebuyers, despite the shifting changes in financial stability as a result of fixed rate deals still coming to an end for people and new much higher mortgage costs being realised”.
Yet, Noye says the wider narrative remains tinged with caution. “The striking 21% year-on-year fall in residential transactions according to recent government stats is a stark reminder of the market’s current hesitance, revealing the public’s wait-and-see approach in the face of fluctuating house prices and mortgage costs”.
Foxtons chief executive Guy Gittins believes a second consecutive monthly increase demonstrates further signs of property market positivity.
“Although the market is yet to return to full health when viewing house price performance on an annual basis, it appears as though a freeze in interest rates is helping to boost homebuyer sentiment and bring a greater degree of stability. This puts us in very good stead looking ahead to the New Year”
Benham and Reeves director Marc von Grundherr takes a similar line: “Despite a turbulent year, we look set to finish pretty much where we started with respect to house price performance and this is certainly no bad thing given that property values boomed during the pandemic”.
He concludes: “While this may seem a tad underwhelming for the nation’s home sellers, they can enter the market with the confidence that their home will continue to command a very strong price indeed and we’ve already seen many make the decision to do so in recent weeks.”
