UK house prices rise for the first time since March: Halifax

Figures from Halifax have shown that average house prices edged up during October, the first rise since March with prices up by +1.1% on the month. According to Halifax, the average UK home now costs £281,974 - around £3,000 more compared to September.

However, on an annual basis, the housing market remains subdued with all UK nations and regions seeing house prices declines.

Nations and regions' house prices

The greatest fall was seen in South East England, where prices decreased by -6.0% over the last year (average house price now £374,066).

Scotland’s annual house price was the most resilient, down just -0.2% annually, with homes in the nation now costing an average of £202,608. It was a similar picture in Northern Ireland, with a decline of -0.5%, and average house prices of £183,922.

Property prices in Wales fell by -3.9% over the year (average house price £213,125).
London continues to have the highest average house price in the UK, at £524,057, falling -4.6% over the last year.

First-time buyer market shows relative resilience

Despite weakness in overall buyer demand, the first-time buyer market has held up relatively well. Buying a first home remains attractive for many, especially against the backdrop of rental prices increasing.

The latest house price data shows prices for first-time buyers are down -2.4% annually, a notably smaller fall than the market generally (-3.2%), over the past year.

Kim Kinnaird, Director, Halifax Mortgages, said: “UK house prices rose in October, up +1.1% on a monthly basis, breaking a run of six consecutive monthly falls. The average house price is now £281,974 – an increase of almost £3,000 compared to the previous month. On an annual basis, prices are down -3.2%, though the decline was at a slower pace than we saw in September (-4.5%).

“Prospective sellers appear to be taking a cautious attitude, leading to a low supply of homes for sale. This is likely to have strengthened prices in the short-term, rather than prices being driven by buyer demand, which remains weak overall. While many people will have seen their income grow through wage rises, higher interest rates and wider affordability pressures continue to be challenges for buyers.

“Across the medium-term, with financial markets not anticipating a decline in the Bank of England’s Base Rate soon, we expect house prices to fall further overall – with a return to growth from 2025.

“The current picture should continue to be seen in the context of the longer-term house price trend as, on average, prices remain around £40,000 above pre-pandemic levels.”

Anna Clare Harper, CEO of sustainable investment adviser GreenResi, says: "Annually, house prices are down 3.2% to £281,974, so in nominal terms, we are back to approximately December 2022 prices.

"The monthly house price rise is interesting, but not relevant because it’s unlikely that you can buy, sell or refinance at this pace. Instead, transactions can easily take two to six months, making longer-term trends more relevant if you are considering doing anything with your home: buy, sell, rent or refinance. Of course, we all are, because housing is a necessity, and we all have to live somewhere.

"This is the same reason why fears of a full-scale crash are scaremongering. Housing is a necessity, overall demand for places to live does not change as a result of the strength of the economy, and housing is so politically significant that no government will allow the market to crash."

Tomer Aboody, director of property lender MT Finance, says: "Some resurgence in pricing in October reflects buyers either fed up of waiting or deciding that now is a good time to buy, with rates slightly lower than recent times.

"With affordability still difficult, not many buyers are able to get on or move up the ladder, but the ones who can are faced with lower stock levels which in turn is maintaining price levels.

"A government stamp duty intervention must surely come soon in order to give the market some much-needed stimulation."

Charlotte Nixon, mortgage expert at Quilter said: "The latest Halifax house price data shows a surprise 1.1% increase in prices despite very subdued transaction levels in the market. We are yet to see a huge influx of properties on the market, which if paired with this low demand will have a negative impact on prices.

"But because potential sellers are holding out, stock levels remain tight and therefore the buyers who are out in the market are still having to compete keeping levels relatively buoyant. However, prices are still down by -3.2% compared to last year.

"Yet, despite these drops, the typical UK home still stands at £281,974, which is still not far off early 2022 levels, still significantly above pre-pandemic values and up £3,000 on the previous month. This shows that even as we've weathered a storm of rate rises, the value of bricks and mortar has held a relatively steadfast course through the economic difficulties of the cost of living crisis.

"The Bank of England just last week opted to hold rates and the reality is we may all need to get used to rates at this level as we enter a "higher for longer" phase. The result of this will not be a housing market in freefall but one that is recalibrating after a period of cheap debt-fuelled buoyancy.

"As mortgage deals come up for renewal, the landscape will continue to shift especially considering ultra-low mortgage rates are now a relic of the past. This will force some people to sell, pushing prices down. For many sellers, especially in the south where the greatest price pressures are felt, the current situation is a reminder that price resilience is a regional affair as in the South

"East England prices decreased by -6.0% over the last year. While some buyers may hold out for pre-pandemic valuations, the interplay of supply and demand, coupled with shifting economic winds, may necessitate a new approach to price negotiations. For those considering their next move, the strategy is less about rushing in and more about measured decisions that suit your life needs in the here and now rather than trying to time the market

"Demand will start to return as even in this difficult financial time, buying a home remains a priority for many. The reduction in buyer demand will return as these higher rates can’t completely quench the desire to own a home. First-time buyers, in particular, are still a driving force, bolstered by contributions from the Bank of Mum and Dad and weighed against the rising costs of renting.

"Patience and preparation are key for both sellers and buyers in the current market. Whether you're planning to buy, sell, or remortgage, it's essential to keep a close eye on economic indicators and to seek advice tailored to your financial circumstances."