House prices are on the rise across the country in what is seen to be good news for the property market in 2024. The average cost of a home in the UK has now climbed for the fourth month in a row, according to Halifax’ latest house price index.
The bank says the average house price jumped up by £3,785 in January, with a typical home in the UK now costing £291,029. Property prices also increased by 2.5 percent annually – the highest annual growth since January 2023. House prices give a good indication of the state of the market, with growing demand often being one of the key factors that drives prices up.
Over the last few years, house prices in the UK have risen off the back of the demand during the pandemic. But there has since been a more recent slowdown in property price growth caused by the cost of living crisis, with rising mortgage and interest rates putting people off buying.
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But property experts are now saying that 2024 has got off to a positive start, with housing activity picking back up thanks to reduced mortgage rates. Kim Kinnaird, director at Halifax Mortgages, said: “The recent reduction of mortgage rates from lenders as competition picks up, alongside fading inflationary pressures and a still-resilient labour market, has contributed to increased confidence among buyers and sellers. This has resulted in a positive start to 2024’s housing market.
“However, while housing activity has increased over recent months, interest rates remain elevated compared to the historic lows seen in recent years and demand continues to exceed supply. For those looking to buy a first home, the average deposit raised is now £53,414 – around 19 percent of the purchase price.
“It’s not surprising that almost two-thirds of new buyers getting a foot on the ladder are now buying in joint names. Looking ahead, affordability challenges are likely to remain and further modest falls should not be ruled out, against a backdrop of broader uncertainty in the economic environment.”
‘This could create clear opportunities for buyers to get a foot on the ladder’
James Briggs, from mortgage lender Together, says that rising house prices could mean good news for first-time buyers. He said: “A rise in house prices indicates a heartening shift in market confidence. While we are still early in the year, mortgage rates are beginning to fall as lenders anticipate a calming of inflation and possible falls in the Bank of England base rate in the next few months. This relative stability could create clear opportunities for buyers to get a foot on the ladder for the first time.”
“Indeed, our research highlights 69 percent* of millennials are particularly ambitious in their aspirations to buy first homes in the next five to 10 years. And, as activity picks up in the lead up to springtime, we anticipate more of this demographic turning this dream into a reality – so long as this group has access to adequate financial support to help open those doors.”
‘Property values will continue to ripen’
It’s also good news for sellers, as demand increases they are likely to start seeing better and more offers on their homes. Marc von Grundherr, director of estate agents Benham and Reeves, commented: “The general view is that 2024 will be a far more fruitful year for the UK property market and we’re already seeing early signs of this.
“There has been a fourth consecutive monthly increase in house prices and a sharp increase in both new sales listings and the number of buyers submitting offers. It really is all systems go at the moment and as market activity continues to build, property values will continue to ripen.”
‘Buyers will pay more’
Jason Tebb, president of OnTheMarket, also gave his view on the Halifax house price index and what this means for buyers and sellers. He said: “Growing optimism has been in evidence since the turn of the year, with an increase in enquiries as falling mortgage rates encourage buyers and sellers who may have been holding off to take action.
“With property prices ticking up again month-on-month, it may be tempting to conclude that buyers will pay more but stretched affordability remains an issue for many.
“The housing market has got off to an encouraging start but rates are still considerably higher than they were during the pandemic and buyers remain sensitive on price. Sellers who take this into consideration and price sensibly, taking advice from experienced local agents, are finding motivated and committed buyers.”
‘Further momentum will build’
Verona Frankish, CEO of Yopa, also commented on the latest findings. “Not only have we seen positive market movement with respect to the monthly rate of house price growth in recent months, but we’re now starting to see an improvement with respect to the annual picture and it’s this measure of health that suggests the market is firmly on the up,” he said.
“Looking ahead, it’s likely that not only has the property market bottomed out with respect to the decline in house prices seen last year, but it’s also likely that interest rates have now peaked. This combination of factors will enthuse both buyer and sellers in equal measure and as the year progresses, we expect further momentum to build.”
