Property prices grew 1.7% overall in 2023, the bank said, beating expectations for the year.
Kim Kinnaird, director of mortgages at Halifax said: “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 with 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.”
South East sees sharpest fallsHouse prices fell the most in the South East during 2023, with homes in this region selling for an average of £376,804, a drop of 4.5% or £17,755 compared to the previous year.
Northern Ireland remains the strongest performing nation or region in the UK, with house prices having increased by 4.1% on an annual basis. The price of the average property in Northern Ireland currently stands at £192,153, up £7,595 compared to December 2022.
Scotland also saw a rise in average house prices over the year, with the average property there now costing £205,170. This is 2.6% higher or £5,277 in cash terms compared to the same time last year.
Looking aheadDespite three monthly increases in house prices in a row, the bank’s outlook for 2024 is less positive. It forecasts that house prices could fall between -2% and -4% over the coming year, although it said that forecast uncertainty “remains high” given the current economic climate.
Ms Kinnaird said: “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.”