House prices rise for first time in six months, says Halifax

  • By Nick Edser
  • Business reporter

House prices rose in October for the first time in six months, based on the Halifax, however it expects values to fall over the subsequent 12 months.

The UK’s largest mortgage lender mentioned prices rose 1.1% final month, taking the common property worth to £281,974.

But the Halifax mentioned the rise was attributable to an absence of properties for sale, and demand from consumers remained weak.

It expects prices to fall till 2025, with consumers going through increased rates of interest and value of residing pressures.

“Prospective sellers appear to be taking a cautious attitude, leading to a low supply of homes for sale,” mentioned Kim Kinnaird, director of Halifax Mortgages.

“This is likely to have strengthened prices in the short term, rather than prices being driven by buyer demand, which remains weak overall.”

Up till not too long ago, the Bank of England had been growing rates of interest steadily in an try and tame hovering inflation. The rise has led to increased mortgage charges for householders.

While the Bank has now left charges unchanged at 5.25% at its previous two conferences, it isn’t anticipated to chop them anytime quickly.

Given that outlook, the Halifax mentioned it anticipated “house prices to fall further overall – with a return to growth from 2025”.

However, it added that the worth falls in latest months have come after a long term of beneficial properties, and it famous that common home prices are nonetheless round £40,000 above pre-pandemic ranges.

The Halifax mentioned that home prices in all UK nations and areas have been down from a 12 months earlier. The greatest fall was in south-east England, the place prices dropped by 6%, whereas Scotland noticed the smallest decline, down simply 0.2% over the 12 months.

It additionally mentioned that regardless of general demand for housing being weak, the first-time purchaser market had “held up relatively well”. It mentioned shopping for a first residence remained a sexy choice, “especially against the backdrop of rental prices increasing”.

The worth enhance in October echoed the findings of rival lender the Nationwide, which mentioned final week that values rose 0.9% final month.

However, the Nationwide mentioned prices have been nonetheless decrease than a 12 months earlier, and that exercise in the housing market remained “extremely weak” with consumers struggling in the face of upper mortgage charges.

Both the Halifax and Nationwide base their survey knowledge on their very own mortgage lending, so the figures don’t embrace those that buy properties with money or buy-to-let offers.

According to the most recent accessible official knowledge, money consumers at the moment account for greater than a 3rd of housing gross sales.

Sarah Coles, head of private finance at Hargreaves Lansdown, mentioned consumers have been nonetheless “horribly thin on the ground”, with little signal of any change in the rapid future.

She added that latest Bank of England figures exhibiting a “miserable” variety of mortgages have been accepted in September was a sign the market will stay subdued.

“It may take a significant shift in mortgage rates before more enthusiasm returns to the market,” she mentioned.

But the pinnacle of on-line property agent Purplebricks, Sam Mitchell, informed the BBC’s Today programme there have been indicators that mortgage lenders have been beginning to compete for clients.

“Yesterday we saw both Halifax and Virgin drop their rates, which I think is super encouraging going into what’s typically a quieter time of year, [and] bodes very, very well for 2024,” he mentioned.

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