House prices rose 0.7% in January, according to Halifax, taking the average UK property price to £300,077, the first time it has exceeded £300k.
The increase follows a 0.5% decline in December, the bank’s latest House Price Index shows, with annual price growth now at 1%, up from 0.4% in December. House prices climbed by nearly 19% in the three years between 2020 and 2023, fueled by ultra-low mortgage costs and increased demand for space following the pandemic.
Halifax said that said that while £300k marks a significant milestone, affordability remains a major challenge for aspiring homebuyers.
However, Amanda Bryden, head of mortgages at Halifax said: “Broader economic conditions continue to provide some support. Wage growth has been outpacing property price inflation since late 2022, steadily improving underlying affordability. That’s a positive trend for buyers, and the long-term health of the market.
“And we’re now seeing more mortgage deals below 4%. If inflation continues to ease, there should be further gradual reductions as the year goes on. All in all, we still think house prices are likely to edge up between 1% and 3% this year.”
Lenders are also introducing new products aimed at supporting first-time buyers, with Santander recently launching a 98% mortgage for those struggling to save a larger deposit.
Regional differences more pronounced
Although steep property prices in many parts of the country can make getting on the property ladder feel out of reach, there are still areas where homes remain relatively affordable.
Ms Bryden said: “For first-time buyers the headline numbers can seem daunting, but it’s important to remember that most are looking at smaller properties in areas that reflect their budget. Many locations offer far more accessible price points, especially in northern regions where homes can often be found for under £200,000.”
There is a widening divide n house price performance emerging between northern and southern regions of the UK.
Northern Ireland remains the standout performer, with average property values there up 5.9% over the past year to £217,206. Scotland has also seen strong gains, recording annual growth of 5.4% and pushing the typical home price to £221,711. Wales, however, has seen more subdued growth, with prices edging up by 0.5% to an average of £228,415.
In contrast, the South East, South West, London and Eastern England, which are the four most expensive areas of the country to buy a home, all saw prices decline annually by more than 1%.
