06 December 2024
If you are covering the latest Halifax house price index, please see the following comment from Karen Noye, mortgage expert at Quilter:
“The latest Halifax House Price Index shows that house prices significantly rose by 1.3% in November providing a clear indication that the UK housing market is showing signs of resilience despite the economic pressures that have dominated much of 2024. The average house now stands at a record £298,083. This increase follows a period of market stagnation and reflects a rebound in buyer activity, which has been supported by declining mortgage rates and greater market stability.
“Recent data from the Bank of England has already pointed to rising mortgage approvals, which reached their highest level since mid-2022. Combined with a reduction in quoted mortgage rates, this suggests that buyers are returning to the market, encouraged by the more favourable lending conditions. However, affordability remains a critical issue, particularly for first-time buyers who are still grappling with high borrowing costs and larger deposit requirements, factors that have constrained demand over the past year.
“The rise in house prices will offer some relief to existing homeowners who may have been concerned about a prolonged market downturn. Yet, questions remain about how sustainable this recovery might be. The Bank of England’s recent decision to reduce interest rates to 4.75% has eased some of the pressure on mortgage holders, but for many households refinancing in the coming months, monthly repayments will still rise significantly compared to previous fixed-rate deals.
“In addition to borrowing costs, broader economic challenges, such as the freeze on income tax thresholds and the rising cost of living, continue to weigh heavily on household finances. For the housing market to maintain momentum, a balance will need to be struck between supporting demand and addressing affordability constraints, particularly as higher interest rates are likely to remain a feature of the market for some time.
“Today’s figures from Halifax suggest a cautiously optimistic outlook, but it is clear that the market remains finely balanced. Government policies aimed at supporting housebuilding and improving access for first-time buyers will be crucial if this recovery is to translate into long-term stability. As we look ahead to 2025, much will depend on whether these early signs of recovery can be sustained in the face of ongoing economic uncertainty.”
