According to the Halifax House Price Index, the average house price rose by 1.1% in December, a £3,000 rise from November. Averaging £287,105, this was the highest figure since March 2023, following 0.6% and 1.2% price increases from the previous two months.
House prices also saw a quarterly increase of 1.2%.
However, the most exciting price difference was the year-on-year change. Compared to property price figures in December 2022, house values rose by 1.7%. This was the first year-on-year growth in eight months.
Kim Kinnaird, director of Halifax Mortgages, said:
“The housing market beat expectations in 2023 and grew by 1.7% annually. The average property price is now £4,800 higher than it was in December 2022. Whilst it’s encouraging that we saw growth in the last three months of the year, this was preceded with property price falls for six consecutive months between April and September.
The growth we have seen is likely being driven by a shortage of properties on the market rather than the strength of buyer demand. That said, with mortgage rates continuing to ease, we may see an increase in confidence from buyers over the coming months.”
Despite the upturn in fortunes, Halifax forecasts a 2-4% price drop in 2024 as many homebuyers reckon with the higher mortgage costs than they would have faced in 2021. This may mean buy-to-let investors could find a good value rental property for sale.
“As we move through 2024, the UK property market will continue to reflect the wider economic uncertainty, and buyers and sellers are likely to be naturally cautious when considering making a move. While wage growth is now above inflation, helping to ease the cost of living pressures for some and improving housing affordability, interest rates are likely to remain elevated for as long as inflation remains markedly above the Bank of England’s target.”
Read More: Looking for more investment property advice? Check out our guide on London property investments.