UK house prices rose for the second month in a row in November, according to a leading index, as a slight easing in mortgage rates helped coax more buyers into the market.
The average price of a UK property rose by £1,394 – or 0.5% – last month to £283,615, according to the mortgage lender Halifax.
It signals an uptick in activity across the housing market, where price growth has stalled over the past year because of an increase in interest rates and subsequent affordability pressures that have driven away otherwise eager buyers.
UK house prices have also been underpinned by a shortage of available properties over the past year, as many sellers wait for the market to normalise and prices to recover.
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On an annual basis, prices are down 1%, although Halifax said this was a “relatively modest” drop given the economic headwinds that have weighed on consumers over the past 12 months. Average house prices are still £40,000 above pre-pandemic levels, having been skewed during the Covid crisis, when people scrambled to buy larger homes.
“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,” Kim Kinnaird, the director of Halifax Mortgages, said. “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.”
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However, Kinnaird said house prices were unlikely to continue their upward climb into the new year. “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.”
Northern Ireland has experienced the strongest rise in house prices over the past 12 months, with the average home costing £4,294 more compared with last year, at £184,684.
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By Kalyeena Makortoff