The latest House Price Index from Halifax has shown that house prices rose for the third consecutive month in December, with the highest monthly rise since March last year.
Prices increased by 1.1% on average from November, taking the average house price to £287,105. The latest figure also represents a 1.7% increase year-on-year, with the average price rising by £4,800.
Despite the positives, the Halifax House Price Index also forecasted that 2024 could see prices fall between 2% and 4% as the uncertain economic climate continues into this year.
Kim Kinnaird, director of Halifax Mortgages, said: “The housing market beat expectations in 2023 and grew by +1.7% on an annual basis. The average property price is now £4,800 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 by property price falls for six consecutive months between April and September. The growth we have seen is likely being driven by a shortage of properties on the market, rather than the strength of buyer demand. That said, with mortgage rates continuing to ease, we may see an increase in confidence from buyers over the coming months.”
“Across all the UK regions, Northern Ireland recorded the strongest house price growth on in 2023, properties here increased by +4.1% to £192,153. Scotland saw property prices increase by +2.6% to £205,170. At the other end of the scale, the South East fell most sharply, houses here now average £376,804 (-4.5%), 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. 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. Our latest forecast suggests house prices could fall between -2% and -4% during the coming year, although, as with recent years, forecast uncertainty remains high given the current economic climate.”