Halifax Reports an Increase in UK House Prices for 2023: An Insight into the Numbers

Contrary to earlier predictions of a decline in house prices for 2023, Halifax has reported a 1.7% increase, defying expectations and injecting a note of optimism into the property market. The latest House Price Index for December 2023 from Halifax reveals that the average price of a home reached £287,105, marking a 1.1% rise on a monthly basis, marking the third consecutive monthly increase.

This unexpected rise comes amid conflicting reports from various indices, including the Nationwide House Price Index, which indicated an annual decline for 2023. However, Halifax attributes this surge to its level of mortgage lending activity and highlights that the scarcity of supply is a key driver, rather than a substantial increase in demand.

Despite this positive turn, Halifax maintains its cautious outlook, anticipating a potential 2% to 4% drop in average house prices for the current year. Kim Kinnaird, Director of Halifax Mortgages, notes that the recent growth is likely attributed to the limited availability of properties on the market, and she emphasizes that mortgage rates easing could contribute to increased buyer confidence in the coming months.

Breaking down the regional performance, Northern Ireland emerged as the frontrunner with a 4.1% increase in house prices to £192,153, while Scotland experienced a 2.6% rise to £205,170. On the flip side, the South East witnessed the most significant dip, with a 4.5% decrease, bringing average house prices to £376,804.

Kim Kinnaird commented on the market outlook, stating, “As we move through 2024, the UK property market will continue to reflect the wider economic uncertainty, and buyers and sellers are likely to be naturally cautious when considering making a move.”

Reflecting on the data, Tom Bill, Head of UK Residential Research at Knight Frank, highlighted the positive shift in annual house price growth, attributing it to economic improvements. He anticipates a seasonal uptick in activity in the spring, fueled by lowered inflation and increasing housing transactions.

Iain McKenzie, Chief Executive of The Guild of Property Professionals, welcomed the rise in house prices for December, signalling a potential recovery after a year of market pressures. While acknowledging the challenges, especially in the South East, he remains optimistic about improved mortgage availability as the Bank of England considers lowering interest rates.

The unexpected rise in house prices offers a glimmer of hope for sellers and signals potential positive momentum in the property market as we navigate through 2024.