House prices in the UK have risen for the second consecutive month according to Halifax’s latest House Price Index.
The UK’s biggest mortgage lender said that prices had risen by 0.5% in November, which suggests that activity in the market is on the increase.
Despite rising month-on-month, house prices still remain lower than last year, standing at an average of £283,615, down 1% on November 2022.
Kim Kinnaird, director of Halifax Mortgages, said: “UK house prices rose for the second month in a row, up by £1,394 in cash terms. Over the last year, despite the wider economic headwinds, property prices have held up better than expected, falling by a relatively modest -1.0% on an annual basis, and still some £40,000 above pre-pandemic levels.
“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 a result of an improving picture on affordability for homebuyers. 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.”
An expectation that that interest rates have peaked and will begin to fall has led to mortgage rates decreasing recently, despite the Bank of England stating that this is unlikely to happen in the near future.
Nevertheless, research from Moneyfacts has shown that the average two-year fixed mortgage rate has fallen to 6.01% from a high of 6.86% back in July.
While average prices fell year-on-year for the UK as a whole, some parts of the country fared better than others. House prices in Northern Ireland rose by 2.3% on November 2022, while Scotland’s house prices remained at the same rate. The South East of England saw the largest annual fall, with prices down 5.7% from last year. Predictably London continued to be the most expensive region with an average house price of £524,592, despite this falling by 3.8% from 2022.
