Halifax has revealed that average house prices experienced a 1.3% increase in January, marking the fourth consecutive month of growth. This surge brings the average

home price to £291,029, up nearly £4,000 from December 2023.

The year-on-year comparison indicates a 2.5% increase in house prices, the highest annual growth rate since January 2023.

Kim Kinnaird, Director at Halifax Mortgages, attributes the recent price resurgence to falling mortgage rates, which have been decreasing since September. Over 50 mortgage lenders reduced their rates in January alone, with some making multiple cuts. Despite a recent slowdown in rate reductions and some lenders hiking their rates, borrowers securing the best deals can still obtain rates just below 4% for a five-year fixed term or slightly above 4% for a two-year fixed term.

Kinnaird notes that while mortgage rates remain higher than pre-2022 levels, they have significantly contributed to increased buyer and seller confidence, resulting in a positive start to the housing market in 2024.

However, affordability challenges persist, with mortgage rates remaining elevated compared to recent years, and demand consistently surpassing supply. The average deposit for first-time buyers now stands at £53,414, prompting nearly two-thirds of new buyers to purchase homes jointly.

Looking ahead, Kinnaird anticipates continued affordability challenges and the possibility of further modest price declines amid broader economic uncertainty.

Estate agents corroborate Halifax's findings, reporting increased activity in the housing market. Simon Gerrard, Managing Director of Martyn Gerrard Estate Agents, predicts a sharp rise in prices, especially in areas experiencing rapid population growth and limited housing supply.

Similarly, Jeremy Leaf, a North London estate agent, observes more valuations, listings, and viewings, indicating a surge in market activity.

With regional variations evident, Northern Ireland leads in house price growth, followed by Scotland and Wales, while the South East of England experiences downward pressure on prices.

In conclusion, experts foresee continued momentum in the housing market throughout 2024, with factors such as stabilizing economies and peaking interest rates driving buyer and seller enthusiasm.