The latest findings from the Halifax House Price Index reveals interesting trends in the UK housing market. 

It states that in January, the average house price increased to £291,029, marking a notable uptick of +1.3% compared to December 2023. In cash terms, this translates to an increase of £3,785. This signifies the fourth consecutive month of rising house prices, propelling the annual growth rate to +2.5%, the highest seen since January of the previous year.

The Nationwide House Price Index was slightly more conservative.

Robert Garner, Nationwide’s Chief Economist summarised – 

“UK house prices rose by 0.7% in January, after taking account of seasonal effects. This resulted in an improvement in the annual rate of house price growth from -1.8% in December to -0.2% in January, the strongest outturn since January 2023”.

As always, these two reports differ which is usually due to regional differences.

This is where the Hometrack House Price Index can be very useful. Aside from stating that the average annual UK house price has fallen by 0.8%, it provides a regional breakdown which could be far more useful for an individual borrower or investor.

The Rightmove House Price Report which focuses more on asking prices, started with the heading –”Tentatively promising new year start as buyer and seller activity jump”

With average asking prices rising by 1.3%, this is apparently – ‘A four year January High’ which could be seen as positive news. 

Summary and Our Thoughts

Although these reports could be seen as positive, many of them are tentative in terms of predicting an overly optimistic view on house prices in 2024.

One of the major things that underpins prices at the moment is affordability. So much has happened with interest rates that this still remains a concern for many borrowers.

Although mortgage rates have generally reduced since the end of 2023, we have seen a slight increase from major lenders over the last week or so.

Although this is normal in the mortgage market, the turbulence and relatively high mortgage rates seen over the last 12-24 months could make potential borrowers / sellers tentative.

What we know for sure is that we have seen a marked increase in activity since the turn of the year. This could be a result of lower rates, a reduction in house prices or higher rents meaning more first time buyers are entering the market. 

Whether this activity is sustainable or not will depend on these factors and others moving forward. Only time will tell.