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08 Dec, 2023

UK Housing Market Recovers: Price Rise for a Second Consecutive Month

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    UK Property Marks Shows Resilience With Another Monthly Price Rise

    Hot on the heels of the Nationwide Building Society House Price Index, Halifax publishes its own HPI.

    The results show that house prices continue to rise month-by-month, with a positive change in house valuations recorded for the second consecutive month.

    This is another sign that the UK housing market, one of the most safe investments in the UK, is continuing its path of recovery following a turbulent 2023 for the UK economy.

    Let’s look at the Halifax Index in greater detail and see what it means for the UK property market as we head into 2024.

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    Halifax House Price Index: At a Glance

    The latest statistics from the Halifax UK House Price Index are as follows:

    • Average house price: £283,615
    • Monthly change: +0.5%
    • Quarterly change: -0.7%
    • Annual change: -1.0%

    According to the Halifax HPI, the UK prices increased by 0.5% in November, following a 1.2% rise in October.

    The average price stands at £283,615, which is £40,000 more than pre-pandemic levels.

    Annual price decline is at -1.0% from November to November, far less traumatic than many experts forecast at the end of 2022 when Liz Truss and Kwasi Kwarteng’s disastrous mini-budget sent the economy into a tailspin. This proves that the housing market is a resilient beast, continually showing how safe property investment can be in the right locations. Good news if you have a property investment strategy in the UK.

    The South East has struggled with price growth in England the most, recording a substantial 5.7% fall. Considering London’s huge prices – coupled with higher mortgage interest rates – it’s not a surprise that sellers are lowering their asking prices to achieve a sale in the region.

    Typically, property investors choose to look in other parts of the UK for more affordable investment opportunities, such as a buy-to-let in Liverpool, where the average property price is below £180,000 according to the HM Land Registry UK House Price Index. With one eye on their buy-to-let costs, savvy investors stand a better chance at a significant ROI if they can identify areas with low property prices and strong tenant demand to drive up rental figures.

    If you want to invest in buy-to-let property, you may want to consider some of our handy BTL guides for good value properties throughout the North West. Check our Birkenhead buy-to-let guide and Stockport buy-to-let guide for more information.

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    How Did Halifax React to the Second Monthly House Price Rise?

    Kim Kinnaird, director at Halifax Mortgages, said:

    “UK house prices rose for the second month in a row, up by +0.5% in November or £1,394 in cash terms, with the average house price now sitting at £283,615. Over the last year, despite the wider economic headwinds, property prices have held up better than expected, falling by a relatively modest -1.0% on an annual basis and still some £40,000 above pre-pandemic levels.

    “The resilience seen in house prices during 2023 continues to be underpinned by a shortage of properties available rather than any significant strengthening of buyer demand. That said, 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. 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.

    “However, 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.”

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      Other Signs the UK Housing Market Is on the Rise

      Like the Halifax House Price Index, the Nationwide Building Society House Price Index also showed a monthly property valuation rise in November, increasing by 0.2%.

      Both indices use their mortgage data to estimate the average UK house price. If one index says prices are up, it could be a good month for that particular lender. However, both indices suggest that the data is typical for the country as a whole. As such, we can have more confidence in the market’s fortunes moving forward.

      So, what does this mean for a property investor?

      Firstly, prices are still lower than in 2022, meaning good-value properties are available on the market. Through most of 2023, high mortgage rates meant many buyers could not get into the buy-to-let market. However, inflation has fallen dramatically over the year, and interest rates have held steady in the later stages of 2023, meaning mortgage lenders have confidence enough to drop their rates, bringing buyer activity back into the market.

      This means buy-to-let investors face a much brighter property landscape than they have done for the rest of the year. The market is resilient – the latest figures indicate as much.

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      Dale Barham

      Dale is a property content writer at RWinvest. Keeping a close eye on the UK property market, Dale helps our readers stay informed and up to date on the latest market news and statistics.

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