House prices rise for second month in a row, says Halifax

House prices rose for the second consecutive month in November, according to the latest figures released by mortgage lender Halifax.

Its latest house price index said the average property price rose 0.5 percent in November, following a 1.2 percent rise in October.

With the average home now at £283,615, prices are still 1 per cent lower than this time last year, but are still 20 per cent above pre-pandemic levels.

Last week, Nationwide also reported that prices were holding up, defying many analysts’ expectations that higher mortgage rates would drive prices down.

The Bank of England base rate remains at its highest level since the financial crisis and higher mortgage rates are forcing millions of home buyers to pay hundreds of pounds more each month to buy.

Kim Kinnaird, director of Halifax Mortgages, said prices were holding up due to a shortage of homes on the market.

He said: ‘Over the last year, despite economic headwinds, property prices have held up better than expected.

“The resilience seen in house prices during 2023 continues to be underpinned by a shortage of available properties, rather than a significant strengthening in buyer demand.

Anthony Codling, managing director at RBC Capital Markets, also believes the latest figures suggest demand continues to outstrip supply.

“House prices so far in 2023 have been higher than most people, including us, would have thought at the beginning of the year,” says Codling.

‘There are still significant amounts of Covid capital in the system, average house prices remain almost 20 per cent higher than before the pandemic.

‘It appears that even in the current weakened property market, demand continues to outstrip supply, keeping house prices high.

“Our love affair with property continues and politicians looking to court homebuyers and homeowners ahead of the election will no doubt be looking to play the role of Cupid in 2025.”

Although prices remain firm according to Halifax figures, the bank does not expect large increases in the short term.

Kinnaird adds: ‘With mortgage rates starting to fall slightly, this may be leading to greater buyer confidence as people are more inclined to go ahead with their home purchase.

‘However, economic conditions remain uncertain, making it difficult to assess the extent to which market activity will be sustained.

“Other pressures – such as inflation, general cost of living, overall employment rates and affordability – mean we expect to see downward pressure on house prices next year.”

South East England suffers biggest falls in house prices

As is always the case, house prices have performed differently across regions of the UK.

Property prices in the South East have fallen more dramatically compared to other regions over the past year, with typical prices falling by 5.7 per cent, equating to a fall of -£22,702.

Meanwhile, in Northern Ireland average house prices have increased by 2.3 per cent annually, while in Scotland prices have remained completely stable year on year.

Jonathan Hopper, chief executive of Garrington Property Finders, says: ‘These national averages can be very misleading and several regional markets remain stagnant. With a 6.1 percent gap between the best and worst performing areas, the great reset is not over yet.

‘Overall, it is the affordable segment of the market that is showing the most resilience. Britain’s major postcodes remain out of reach for their traditional buyers and, as a result, places like London have seen significant price drops this year.

‘It is also worth remembering that localized price increases are likely to be due to a shortage of stock rather than a significant increase in demand.

‘Government data shows that the number of homes sold in October fell by a fifth compared to the same month last year.

‘Buyers remain firmly in the driver’s seat, with many using their strong negotiating position to demand (and obtain) significant discounts on asking prices. In some areas we continue to see double-digit price reductions.’