UK house prices register first increase since March, says Halifax

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UK house prices have registered their first monthly increase since March, according to data published on Tuesday, as cautious sellers put fewer properties on the market.

House prices rose 1.1 per cent between September and October, mortgage provider Halifax said, ending a run of six consecutive monthly falls. However, they were still down 3.2 per cent compared with October last year.

Kim Kinnaird, director at Halifax Mortgages, said prospective sellers had held back from marketing their homes, leading to a lower supply.

“This is likely to have strengthened prices in the short-term, rather than prices being driven by buyer demand, which remains weak overall,” she said, adding that despite strong wage growth, higher interest rates and wider affordability pressures continued to pose challenges to buyers.

Last week, mortgage provider Nationwide reported UK house prices rose by 0.9 per cent between September and October, but remained 3.3 per cent lower than the same period in 2022. 

A more resilient housing market could be less of a drag on economic growth as it increases confidence and spending on housing-related goods.

House prices boomed during the pandemic when historically low interest rates boosted demand, but they have declined since August last year on the back of higher borrowing costs. At the same time, a strong labour market and a low supply of housing have supported prices.

Andrew Wishart, senior property economist at consultancy Capital Economics, said Halifax’s data “confirmed that house prices are indeed rising, suggesting that the high cost of borrowing alone is not sufficient to trigger the leg down in house prices we predicted”.

The typical UK home now costs £281,974, down £11,000 from the August 2022 peak but still £42,600 above the level in February 2020, before the pandemic.

Halifax reported an annual decline of 2.4 per cent in prices for first-time buyers, indicating more resilience than the overall market.

Although house prices rose month on month, it said all UK nations and regions reported prices dropping on an annual basis; south-east England registered the biggest fall of 6 per cent.

Prices in Scotland were the most resilient, down 0.2 per cent annually. In London prices fell by 4.6 per cent but remained the most expensive, with the average home costing £524,057.

Housebuyers and mortgage holders are set to face continued pressure until at least the middle of next year, with financial markets expecting the Bank of England to hold interest rates at or around their current level of 5.25 per cent.

Kinnaird said that “across the medium-term . . . we expect house prices to fall further overall – with a return to growth from 2025”.