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UK house prices stabilise after four-month fall, Halifax says

Published 07/02/2023, 07:09
Updated 07/02/2023, 09:00
© Reuters. A home is advertised for sale in London, Britain August 4, 2016. REUTERS/Neil Hall/Files

© Reuters. A home is advertised for sale in London, Britain August 4, 2016. REUTERS/Neil Hall/Files

LONDON (Reuters) - British house prices were unchanged in January after falling in month-on-month terms in each of the previous four months as borrowing costs rose, mortgage lender Halifax said on Tuesday.

The annual rate of house price growth slowed to 1.9%, the weakest increase in three years, Halifax said.

Britain's housing market saw a surge in demand from buyers during the coronavirus pandemic but a sharp rise in interest rates over the past year and the squeeze on households' budgets caused by high inflation has hit the momentum.

Kim Kinnaird, a director at Halifax Mortgages, said the trend of higher borrowing costs hitting demand was likely to continue in 2023.

"For those looking to get on or up the housing ladder, confidence may improve beyond the near term," she said.

"Lower house prices and the potential for interest rates to peak below the level being anticipated last year should lead to an improvement in home-buying affordability over time."

In London, where the housing market has underperformed those of other regions of the country, prices in January were unchanged from the same month last year after rising by nearly 3% in the 12 months to December, Halifax said.

Rival mortgage lender Nationwide said last week its measure of house prices dropped by a bigger-than-expected 0.6% in January and was 3.2% below its peak in August.

As well as the Bank of England's increases in interest rates since December 2021, there was a major disruption to the mortgage market in late September and October following former prime minister Liz Truss's "mini budget".

Mortgages approved in December fell to their lowest since the 2008-09 global financial crisis, excluding the start of the COVID-19 pandemic when there were strict lockdown restrictions, the BoE said last week.

© Reuters. A home is advertised for sale in London, Britain August 4, 2016. REUTERS/Neil Hall/Files

Martin Beck, an economist with forecaster EY Item Club, said January's flat-lining of prices, as recorded by Halifax, might prove only a temporary pause in a trend of falling prices.

"Although mortgage rates have dipped from post-mini-Budget peaks, they're still at their highest in a decade," he said.

Latest comments

A small reprieval before future downside. Corection in price will be between 15% to 30% depending on area. Buying a house now is ill advised.
highly unlikely
in our Area MK, the number of property in market increased more and buyer's limited..
What a load of nonsense, the estate agents in our area have had no decline in the house prices and are selling houses quicker than you can get a McDonald’s takeaway. Also mortgage lenders have had a record time of lending money for new mortgages.
Depends on area, no one place is same
Sounds just like an estate agent. 10 interest rate increase’s , energy bills tripling , most house’s over priced and they sill say they are selling like hot cakes ..(HAM it up) only a fool would buy a house now…Keep flipping them burgers Fred..!
Sounds more like estate agents selling at a discount to offload inventories in preparation for future downside. I would not touch the property market for the next year and a half.
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