Following the release of Halifax’s HPI data that showed that house prices increased by +0.7% in January, property professionals have shared their thoughts.
This increase pushed the average property price to a new record high of £299,138. However, annual growth slowed to 3%, the slowest rate since last July.
Amanda Bryden, Head of Mortgages, Halifax, said: “The UK housing market started the year on a positive note, with average prices rising by +0.7% in January, more than recovering the slight dip of -0.2% in December.
“Affordability is still a challenge for many would-be buyers, but the market’s resilience is noteworthy. There’s strong demand for new mortgages and growth in lending. With a stamp duty increase looming, some of this demand may have come from first-time buyers eager to complete transactions before the end of March.
“Despite geopolitical uncertainties, and waning consumer confidence, other key indicators look fairly positive for the housing market. The Bank of England has made its first base rate cut of the year, and there are probably more to come. Household earnings are expected to continue outpacing inflation – albeit that gap may narrow – easing some of the financial pressure still being felt from the cost-of-living squeeze.
“As things stand, mortgage rates are likely to hover between 4% and 5% in 2025, influenced by both global financial markets and domestic monetary policy. Over the past year, buyers have been getting used to this new normal, understanding that rates are unlikely to return to the historical lows of 1%.
“But the fundamental issue in the housing market remains the lack of supply. This long-term trend, coupled with a gradual improvement in affordability, should support further modest house price growth this year.”
Industry reaction:
David Johnson, managing director of INHOUS, said: “January’s property market was driven by two buyer demographics in particular. First-time buyers rushing to beat the looming changes to Stamp Duty thresholds and, on the other spectrum of the market, high-net-worth-individuals and property investors who revaluated the UK property market following Rachel Reeve’s plans to soften her previously announced non-dom tax changes. The heightened demand has contributed to more competitive market conditions for house hunters and the majority of properties holding their value, however, buyers should not shy away from entering price negotiations.”
Nathan Emerson, CEO of Propertymark commented: “As we embed ourselves into 2025, confidence is being echoed within the housing market, as house prices and mortgage lending remain buoyant.
“With the Bank of England announcing that interest rates are tracking downward, mortgage rates and financial pressures are now likely to continue to slowly improve in the imminent future for those looking to make their home move.”
Amy Reynolds, head of sales at Antony Roberts, said: “January was busier than normal, with a lot of market appraisals, which bodes well for a busy spring market.
“Increased activity from first-time buyers has helped, with more sales agreed in chains where someone is keen to take advantage of the stamp duty concession before it ends in March. The benefit to the first-time buyer is instant as it is real cash in their pocket, allowing someone to buy who might not have been able to, and the government perhaps needs to consider further stimulus for the market in its Spring statement.
“While all this suggests growing confidence, it’s too soon to say for certain how the market will unfold.”
This article is being updated
Read the orginal article: https://propertyindustryeye.com/halifax-house-price-index-3/
