However, annual price growth slowed, with prices down 1% in the 12 months to November, although this was less than October’s 3.1% drop. The bank said that the average price of a home is now £283,615, which is around £40,000 higher than pre-pandemic levels.
The UK housing market has proved resilient over the past year, despite rising interest rates and steeper mortgage costs. Several lenders have trimmed mortgage rates in recent weeks, amid hopes that interest rates may have peaked.
Kim Kinnaird, director at Halifax Mortgages, said: “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 as 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, it’s impossible to know whether prices will maintain their upward trajectory, with the Office for Budget Responsibility predicting that things may get worse before they get better. It expects house prices to fall 4.7% in 2024.
Halifax agreed that there are no guarantees that we’re out of the woods just yet. Ms Kinnaird said: “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.”
Northern Ireland shows strongest annual growthAverage property prices in Northern Ireland are up 2.3% in a year, according to Halifax, making it the strongest performing region of the UK.
House prices in Scotland also held up, with prices remaining unchanged annually at an average of £203,116. Prices in Wales fell by 1.5% over the year, bringing the average cost of a property there to £215,787.
The South East of England has seen the biggest falls in prices, with the average cost of a property in this region down 5.7% in a year.
London has retained the top spot for the highest average house price in the UK however, at £524,592, though prices in the capital have now fallen by -3.8% on an annual basis.