© Reuters. Buildings in the City of London are seen alongside Victorian residential housing in South London, Britain, August 1, 2023. REUTERS/ Susannah Ireland
LONDON (Reuters) – British house prices rose 2.5% in the yr to January, the strongest annual progress fee for a yr, in line with knowledge from mortgage lender Halifax on Wednesday which added to tentative indicators of momentum in the housing market.
In month-on-month phrases, house prices rose 1.3%, which marked the fourth consecutive enhance and the most important month-to-month gain since June 2022.
Kim Kinnaird, director of mortgages at Halifax, mentioned a current drop in mortgage charges, falling inflation and a resilient labour market had helped confidence amongst consumers and sellers in early 2024.
The Bank of England’s subsequent transfer for rates of interest appears prone to be downwards – though when is open to query – which can assist housing market exercise in future months.
But she added that there have been nonetheless causes for warning.
“Affordability challenges are likely to remain and further modest falls should not be ruled out, against a backdrop of broader uncertainty in the economic environment,” Kinnaird mentioned.
Other gauges of the housing market have additionally pointed to a brighter outlook. Last week rival mortgage lender Nationwide mentioned house prices had risen 0.7% in month-to-month phrases in January – marking a fifth month with none declines.
“As the (Halifax) increase mirrored a large rise in the Nationwide index for the same month, there is little doubt that house prices made a strong start to the year,” mentioned Andrew Wishart, senior property economist at consultancy Capital Economics.
Britain’s housing market – like these in many Western nations – boomed through the COVID-19 pandemic, boosted by record-low rates of interest, non permanent tax breaks and a larger demand for residing house as folks labored from dwelling.
Official figures for November confirmed that British house prices had fallen 2% from their peak in September 2022, however had been nonetheless 24% increased than earlier than the pandemic.