Halifax House Price Index Reveals December Surge but Warns of Potential 2024 Downturn

by | Friday 5th Jan 2024 | Mortgage News

In the latest Halifax House Price Index report for December 2023, UK house prices have experienced a third consecutive monthly rise, but experts caution a potential downturn in 2024.

December UK House Price Surge

According to the Halifax House Price Index, the average house prices in the UK saw a notable increase of +1.1% in December 2023, marking the third consecutive monthly rise. The typical UK home now commands a price of £287,105, reflecting a rise of just over £3,000 compared to the previous month. This surge has propelled the average property value to the highest level since March 2023.

In the report Kim Kinnaird, Director of Halifax Mortgages, expressed optimism about this upward trend, attributing it to a shortage of properties on the market rather than a robust increase in buyer demand. Kinnaird highlighted that the housing market exceeded expectations in 2023, growing by +1.7% annually, with the average property price now £4,800 higher than in December 2022.

Regional House Price Variations

The report reveals regional disparities in property price movements. Northern Ireland emerged as the strongest performer, with house prices increasing by +4.1% annually, bringing the average property cost to £192,153. Scotland also experienced growth, recording a +2.6% increase, resulting in an average property price of £205,170.

However, the South East faced the most significant downward pressure, witnessing a substantial decline of -4.5%. Homes in this region now have an average price of £376,804, representing a drop of £17,755. London, while still retaining the highest average house price across all regions at £528,798, has seen a decline of -2.3% on an annual basis.

2024 UK Property Outlook

Despite the recent positive trends, Halifax warns that the UK property market will likely mirror broader economic uncertainty in 2024. Kim Kinnaird stated, “Buyers and sellers are likely to be naturally cautious when considering making a move.” The forecast predicts house prices could experience a decline ranging from -2% to -4% throughout the year. However, Kinnaird emphasised the high level of uncertainty in the forecast due to the prevailing economic climate.

While wage growth has outpaced inflation, contributing to improved housing affordability for some, the report notes that interest rates are likely to remain elevated as long as inflation stays significantly above the Bank of England’s target. Nevertheless, the easing of mortgage rates may instil confidence in buyers over the coming months.

Speak to a Mortgage Broker in 2024

So, while December showcased a positive trend in UK house prices, the looming economic uncertainty and cautious market sentiments suggest that 2024 could pose challenges for the real estate sector. Homebuyers and sellers are advised to stay vigilant and informed as they navigate the evolving landscape of the UK property market.

However, property has and will always be a wise thing to invest in as demand still outweighs supply in the UK. So if you are considering purchasing in 2024 and making the most of the recent mortgage rate decreases, then you can start by having a fee free initial mortgage consultation with one of our brokers here at Oportfolio. Call or email our team today to arrange a phone call. We are here to help.

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If you have any questions about UK mortgage news or or anything you’ve read then please get in touch. We’d love to hear from you.

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