UK house prices soar: British house prices in December showed a year-on-year increase for the first time in eight months, according to mortgage lender Halifax. This development suggests a potential stabilisation in the property market following the impact of elevated borrowing costs.

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Halifax reported a 1.7 per cent rise in house prices compared to December 2022. On a monthly basis, prices increased by 1.1 per cent from November.

The surge in demand during the COVID-19 pandemic subsided as the Bank of England raised interest rates to address rising inflation. 

However, recent weeks have seen a decline in mortgage rates, encouraging some buyers to re-enter the market. 

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Bank of England data from Thursday revealed the highest number of approved mortgages in November since June. 

Halifax Mortgages Director Kim Kinnaird noted that December’s price increase could be attributed to a limited supply of properties for sale, but the drop in mortgage rates raises the prospect of increased buyer confidence in early 2024. 

Despite this, Halifax forecasts a potential house price decline ranging from -2 per cent to -4 per cent in the coming year, acknowledging the ongoing economic uncertainty. 

Last week, rival mortgage lender Nationwide reported a 1.8 per cent year-on-year decrease in house prices for the 12 months ending December, marking the most notable decline since 2008 during the global financial crisis.

(With Reuters Inputs)