Receive a complimentary email, the Morning Headlines, with updates from our journalists around the globe.
Join our complimentary daily newsletter, the Morning Headlines email.
A new index has been released, disclosing the average house prices in each region of the UK. Despite facing challenges such as higher taxes, inflation, and cost of living pressures, the market surpassed expectations in 2023.
In 2023, the House Price Index for Halifax reported a general rise of 1.7% in property values, with certain areas, like South East England, experiencing notable decreases in house prices.
In contrast, in different areas like Northern Ireland and North West England, there was a positive development for homeowners as the average cost of a house rose, providing a promising start to 2024.
In December, the average cost of a house in the UK increased by 1.1% compared to the previous month. This marks the third consecutive monthly increase. The typical UK house price for December 2023 was £287,105, which is higher than the price of £282,305 in the same month the previous year.
The director of Halifax Mortgages, Kim Kinnaird, stated that there was “promising” growth in the last quarter of the previous year. However, this was preceded by a decline in property prices for six months in a row from April to September.
The speaker cautioned that the recent increase in growth is most likely due to a lack of available properties, rather than a strong demand from buyers. However, they also mentioned that the decreasing mortgage rates could potentially lead to a rise in buyer confidence in the upcoming months.
According to the Halifax index, Northern Ireland experienced the largest annual rise in house prices, with the average cost of a home there reaching £192,153 in December 2023, a 4.1% increase from December 2022.
In the last 12 months, Scotland saw a 2.6% increase in the average house price, placing it in second position with a price of £205,170.
The region with the highest property prices in the country, South East England, experienced the largest decrease in prices. In December, the average cost of a home in this area was £376,804, a decline of 4.5 percent.
In South West England, there was a significant decrease in property prices. The average cost of a property there is now £293,067, which is a 3.9% decrease. A comprehensive list of the changes in each region can be found below.
Lenders offering mortgages have recently started reducing their rates in preparation for the Bank of England’s potential decrease in interest rates this spring. This positive economic forecast means that borrowing money will become more affordable.
Experts predict that the market is becoming more competitive, leading to a potential price competition among lenders. However, despite this, some homeowners may still experience a significant increase in their monthly expenses when their current agreements come to an end.
On Thursday Moneyfacts, the financial information service, said the average cost of a two-year deal had fallen from 5.92 per cent to 5.87 per cent – the lowest level for nearly seven years.
Analysts are reporting that the mortgage market is becoming increasingly active.
Although mortgage rates have begun to decrease, they are still significantly higher than what people have become accustomed to in recent times. This means that over a million homeowners will likely experience an increase in their monthly payments when their current deals expire this year.
According to Alice Haine, a personal finance analyst from Bestinvest, while the mortgage market may be becoming more active, this will not completely alleviate the difficulties faced by approximately 1.6 million current borrowers whose low fixed rate agreements are ending this year.
Lenders have taken into account the possibility of the Bank initiating interest rate reductions this year and have been lowering their rates in anticipation of a potential price competition as the economic forecast continues to improve.
Experts anticipate a decrease in rates later this year. Polly Gilbert, the chief marketing officer of Tembo Money, stated that a competition among mortgage prices is expected to happen as inflation and interest rates decline. She expressed her satisfaction with the change in interest rates and believes that a positive trend is emerging.
First Direct became one of the latest lenders to announce it was cutting rates, with deals below 4 per cent set to be available from Friday. The announcement was made following rate cuts from other lenders this week, including HSBC UK and Halifax.
Complete list of regions:
East Midlands: £234,578, -2.6%
Eastern England: £325,634, -3.5%
London: £528,798, -2.3%
North East: £168,274, -0.9%
North West: £226,765, 0.3%
Northern Ireland: £192,153, 4.1%
Scotland: £205,170, 2.6%
South East: £376,804, -4.5%
South West:£ 293,067, -3.9%
Wales: £216,730, -0.5%
West Midlands: £ 247,122, -1.4%
Yorkshire and Humber: £204,904, 0.1%
Source: independent.co.uk
