Halifax reports surprise jump in house prices — but agents, lenders and analysts call for caution

The latest figures from Halifax are a step in the right direction, but there is plenty of uncertainty and negative pressures in the market.

The average house price in the UK has risen for the fourth consecutive month, according to the latest figures published by Halifax bank. The average house price is now £291,029, a monthly change of 1.3% and some 2.5% higher than this time last year. 

Responding to the news, a variety of agents, lenders and analysts were cautiously optimistic on the news, with Halifax themselves warning against being too optimistic. ‘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,’ said Kim Kinnaird, director at Halifax Mortgages. 

‘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,’ he added.

In a post on X (formerly known as Twitter), the i’s housing correspondent Victoria Spratt noted that the Halifax data is a nationwide average. Prices in the south east of England, for example, have fallen by -2.3 %, with the highest growth being recorded in Northern Ireland — an area where house prices had been low.

‘This is data from just one mortgage provider,’ she adds, ‘It can only tell us about homes which have mortgages on them. Not cash sales from, say, auctions.’ She notes that both ‘HMRC and the Bank of England’s data are still showing that housing market is slow’ and that the number of mortgage approvals remains low.

However, some lenders and agents remain more bullish. ‘Today’s data shows [sic] that the property sector is beginning to show signs of recovery,’ noted Daniel Austin, CEO of ASK Partners. ‘With a decline in inflation YoY and the peaking of interest rates, the overall outlook has considerably improved.’ 

‘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, with a fourth consecutive monthly increase in house prices and a sharp increase in both new sales listings and the number of buyers submitting offers,’ notes Benham and Reeves director Marc von Grundherr.

Verona Frankish, CEO of agents Yopa, boldly notes that ‘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.’

In a comment on the news, Foxtons CEO noted that while interest rates may have peaked, it’s ‘important to note that [they] remain at 5.25% and there is no guarantee of when this will change’. Indeed, at the January 31 meeting of the Bank of England’s Monetary Policy Committee, the vote to keep interest rates at 5.25% was passed by a majority of 6-3. However, one member voted to reduce them, while two wished to see interest rates increase.