Halifax House Price Index: UK Property Prices Are Increasing

In a testament to the resilience of the UK property market, the latest Halifax House Price Index (HPI) reveals that house prices in April 2024 were 1.1% higher than the same month a year earlier.

The average house price now stands at £288,949, a slight increase from £288,430 recorded a month earlier. Quarterly change remains steady at 0.8%, with a modest 0.1% uptick in prices on a month-on-month basis.

Amanda Bryden, Head of Mortgages at Halifax, commented on the findings, stating, "UK house prices held steady in April, with a marginal monthly increase of just +0.1%. Annual growth rose to +1.1%, a result influenced by the base effect of weaker price growth around this time last year."

She further elaborated, "While there is often intense scrutiny of monthly price fluctuations, it's important to recognise that average house prices have largely stabilised in the early months of 2024. This signals a housing market finding its footing amidst higher interest rates. Despite borrowing costs being higher than in previous years, homebuyers are gaining confidence from a period of relative stability."

Bryden highlighted positive indicators of market activity, noting, "Activity and demand are on the rise, with greater numbers of mortgage applications observed so far this year. Industry-wide, mortgage approvals have reached their highest point in 18 months."

Discussing shifting buyer behaviour, Bryden mentioned, "Our recent research indicates that buyers, especially first-time buyers, are adjusting their expectations in response to higher borrowing costs. This is reflected in a trend of targeting smaller properties. Flats, in particular, have seen a notable increase in value, narrowing the 'growth gap' with larger properties that has persisted for the past four years."

Addressing affordability challenges, Bryden acknowledged, "Affordability constraints remain a significant hurdle for new buyers and those coming off fixed-term deals. Mortgage rates have seen slight increases in recent weeks, primarily driven by expectations around future Bank of England base rate changes."

Looking ahead, Bryden expressed optimism, stating, "If, as anticipated, downward moves in Bank Rate materialise later this year, fixed mortgage rates are expected to decline. Coupled with the market's resilience in recent months, we anticipate modest property price growth throughout 2024."

The latest Halifax HPI offers a glimpse into the evolving dynamics of the UK property market, highlighting its adaptability and continued appeal to investors and homebuyers alike.