Halifax has reported that UK house prices rose for the second month in a row in November.
Average house prices increased by 0.5% in November, following a rise of 1.2% in October.
This means that property prices have fallen by 1.0% on an annual basis.
The ‘typical’ UK home now costs £283,615, around £1,300 more than last month.
Kim Kinnaird, director at Halifax Mortgages, said: “UK house prices rose for the second month in a row, up by +0.5% in November or £1,394 in cash terms, with the average house price now sitting at £283,615. Over the last year, despite the wider economic headwinds, property prices have held up better than expected, falling by a relatively modest -1.0% on an annual basis, and still some £40,000 above pre-pandemic levels.
“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, 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.”
Mark Harris, chief executive of mortgage broker SPF Private Clients, added: “While lenders are on the look out for potential headwinds which might impact mortgage pricing, they are much more confident than they have been in recent months. There is much less volatility in the cost of funds with Swaps, which underpin the pricing of fixed-rate mortgages, continuing to edge downwards amid speculation that base rate has peaked and the next move will be a reduction.
“With five-year Swaps dipping below 4%, taking them back to a little higher than they were this time last year, the direction of travel for fixed-rate mortgages continues to be downwards. Although borrowers need to get used to living in a higher-rate environment, with the days of sub-1% mortgages long gone, two- and five-year fixes are now available from less than 4.5%, which is starting to feel more palatable.”
Alex Lyle, director of Richmond estate agency Antony Roberts, concluded: “Despite plenty of distractions at this time of year, there are serious buyers out there who are keen to transact at the right price. There is still competition but not much stock, as you would expect in the run-up to Christmas, with many would-be sellers choosing to hold off coming to market until the spring.
“The market is showing gentle signs of picking up and is more stable than it was six months ago with the pause in interest rate rises having a positive impact. As the inflation figures continue to be encouraging, it is unlikely that the Bank will have to raise rates again which is having a positive market sentiment on market sentiment.”
