The annual rate of house price growth remained flat during February at +2.1% for the third month in a row, showing further signs that the stability we were used to pre-pandemic is returning, according to the latest market analysis by Halifax.
This morning's data shows that a typical UK property now costs £285,476 - up from £282,360 last month. Average house prices in London are now £526,842, a 0.9% fall from January’s £530,416. London may be affected by its large proportion of flats – prices for which have broadly stagnated. Despite this slowdown, homes in London still cost over £240,000 more than the UK national average.
Annual growth reduced most significantly in the North East, at 1.1% in February vs a rise of 3.6% in January, with homes now costing an average of £163,953.
Annual growth fell the least in Scotland. House prices in the nation are now an average of £198,779 (a growth rate of 2.2%, vs 2.3% in January.) Similarly in Wales, annual growth in February was 1.2% (vs 1.9% in January), with homes costing £210,917, on average. Those purchasing a home in Northern Ireland will now pay £185,009, on average, an annual growth rate of 5.7% (vs 7.0% in January.)
Kim Kinnaird, Director, Halifax Mortgages, said: “The average house price in February was £285,476, 2.1% up on this time last year, and has been stable over the last three months.
“When comparing to January, there was a 1.1% increase in house prices through the month of February, although overall prices are flat compared to three months ago. Recent reductions in mortgage rates, improving consumer confidence, and a continuing resilience in the labour market are arguably helping to stabilise prices following the falls seen in November and December. Still, with the cost of a home down on a quarterly basis, the underlying activity continues to indicate a general downward trend.
“In cash terms, house prices are down around £8,500 (-2.9%) on the August 2022 peak but remain almost £9,000 above the average prices seen at the start of 2022 and are still above pre-pandemic levels, meaning most sellers will retain price gains made during the pandemic. With average house prices remaining high housing affordability will continue to feel challenging for many buyers.”
Nathan Emerson, Chief Executive of Propertymark, said: "Year on year, estate agents across the UK have seen a small drop in the number of sales being agreed whilst the number of new properties coming to market has remained the same.
"Increases to interest rates have caused buyers to rethink their budget and haggle on price, but the drive evidently still remains to see their purchase through and move home."
Tom Bill, head of UK residential research at Knight Frank, said: “The UK housing market appears near the end of a long hangover from the mini-Budget rather than on the verge of a price plunge. Activity stopped well before Christmas due to the mortgage market turmoil but has picked up this year as people come to terms with where rates are settling.
"That said, asking prices are likely to come under more pressure as we enter the traditionally busier spring market due to tighter affordability. We expect around half of the 20% increase seen during the pandemic to unwind but most evidence that is not backwards-looking points to a stronger market than expected.”
Iain Crawford, CEO of Alliance Fund, commented: “House prices appear to have stabilised at a far quicker pace than anticipated, following the string of significant downward monthly corrections caused by the turbulence of last September’s mini-budget.
This suggests that the nation’s homebuyers and sellers are coming to terms with the new normal of higher interest rates and are continuing to transact at this new middle ground, having adjusted their position in the market accordingly.