The property market has outperformed expectations and seen an increase in house prices in the last month, according to Halifax.
UK house prices have risen for the third month in a row. Halifax says that average house prices went up by 1.1% in December and that prices grew overall by 1.7% in 2023. The typical house now costs £287,105 – which is £3000 more than last month.
‘The housing market beat expectations in 2023 and grew by 1.7% on an annual basis,’ says Kim Kinnaird, Director, Halifax Mortgages. ‘The average property price is now £4800 higher than it was in December 2022. Whilst it’s encouraging that we saw growth in the last three months of the year, this was preceded with property price falls for six consecutive months between April and September.
Property shortage
‘The growth we have seen is likely being driven by a shortage of properties on the market rather than the strength of buyer demand,’ adds Kinnaird. ‘That said, with mortgage rates continuing to ease, we may see an increase in confidence from buyers over the coming months.’
Northern Ireland has recorded the strongest house price growth in the last year, with properties increasing by 4.1% to £192,153. Scotland saw an increase of 2.6% annually to £205,170. The South East saw the sharpest price fall by 4.5%, with the average house price now £376,804 – a drop of £17,755.
‘As we move through 2024, the UK property market will continue to reflect the wider economic uncertainty, and buyers and sellers are likely to be naturally cautious when considering making a move,’ adds Kinnaird. ‘While wage growth is now above inflation, helping to ease cost of living pressures for some and improving housing affordability, interest rates are likely to remain elevated for as long as inflation remains markedly above the Bank of England’s target.’
House prices may dip
Halifax predicts that house prices will dip between 2% and 4% this year, although it admits that it’s hard to make predictions with any great certainty during the current economic climate.
It was surprising to see that record numbers of properties went on the market on Boxing Day. Rightmove reported just over 10,000 new properties going up for sale, which was 26% more than the previous year.