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House Prices Show Modest Rise but Market Remains Cautious

The latest Halifax house price index for November indicates a gradual rise in UK house prices, marking the second consecutive month of increases. Despite this, the property market is still treading cautiously, with a 1% annual decline recorded as of September. The average house price now stands at £283,615, which is approximately £40,000 higher than pre-pandemic levels.

Northern Ireland leads with the strongest annual growth, up 2.3%, while the South East of England sees the most significant annual decline, dropping 5.7%.

Key findings from the index include:

  • A 0.5% increase in average house prices in November, following a 1.2% rise in October.
  • A 1.0% decrease in property prices on an annual basis.
  • The typical UK home now costs around £1,300 more than last month.
  • The South East of England faces the most significant downward pressure on house prices.

Industry experts have weighed in on these developments. Sarah Coles, head of personal finance at Hargreaves Lansdown, cautions against viewing these increases as a sign of a robust market recovery. She explains, “House prices are robust, and the annual fall is now a modest 1%… Unfortunately, sellers face a problem that’s all too familiar now.” Coles highlights the ongoing challenges in finding buyers and anticipates a potentially difficult 2024 for the property market.

Foxtons CEO, Guy Gittins, acknowledges the positive trend but notes the market has not fully recovered on an annual basis. He remains optimistic about the stabilizing influence of frozen interest rates on homebuyer sentiment.

Verona Frankish, CEO of Yopa, observes a thawing of the cooling market conditions, with house price indices showing a positive direction and an increased interest from buyers and sellers ahead of the new year.

Fred Jones, Chief Operating Officer at UPSTIX, points out the mixed national picture regarding house prices and advises realism in pricing, especially for smaller properties.

Marc von Grundherr, Director of Benham and Reeves, comments on the resilience of house prices throughout a turbulent year, while Jonathan Samuels, CEO of Octane Capital, mentions the impact of higher mortgage rates and the recent increase in mortgage approvals.

Overall, the modest rise in house prices indicates a cautious optimism in the UK property market, with industry experts advising patience and realism in the face of economic uncertainties and fluctuating buyer demand.