UK House Prices Nearing 2022 Peak, Halifax Reports
UK House Prices Nearing 2022 Peak, Halifax Reports
According to the latest data released by Halifax, UK house prices have shown a remarkable 1.7% annual surge, bringing the average cost of a UK house very close to the peak recorded in 2022.
The report indicates that the average UK property price is now only £1,800 below the peak set in June 2022, following a 0.4% increase in February. This marks the fifth consecutive month of price increases in the UK housing market.
On a yearly basis, property prices have increased by 1.7%, slightly lower than the 2.3% growth seen in the previous month. The average UK property price in February was £291,699, almost £1,000 higher than the previous month.
Kim Kinnaird, director of Halifax Mortgages, noted that these figures suggest a relatively stable start to 2024 and align with other positive indicators of increased housing activity. Kinnaird highlighted that the average price of a home is now just around £1,800 shy of the peak seen in June 2022.
While lower mortgage rates and expectations of Bank of England interest rate cuts are boosting buyer confidence in the short term, Kinnaird also mentioned that the downward trend on rates is showing signs of fading. A potential decrease in housing prices remains a possibility in the coming year, given the challenges of raising a deposit and managing a substantial mortgage despite rising incomes and declining inflation.
In terms of regional differences, London continues to have the highest average property price at £536,996, while the northeast has the lowest at £171,294, up 4.2% from a year ago. Prices in the southeast and eastern regions of England experienced marginal decreases of 0.6% and 0.8%, respectively.
Chancellor’s Tax Cut Spurs Optimism for Housing Market
In related news, Chancellor Jeremy Hunt announced several property tax adjustments in the recent budget, including a reduction in the capital gains tax rate on houses from 28% to 24% starting in April 2024. These measures are aimed at incentivizing second homeowners and landlords to sell their properties, thereby increasing the supply of homes available for various types of buyers.
Industry experts like Nicky Stevenson, managing director of Fine & Country, are eager to see if the capital gains tax cut will prompt landlords to sell their properties, potentially revitalizing the housing market and benefiting first-time buyers looking to enter the market.
Amy Reynolds, head of sales at Antony Roberts in London, reported an increase in buyer activity and a strong pipeline of serious applicants, indicating a promising outlook for the upcoming spring market. However, Sam Mitchell, chief executive of Purplebricks, cautioned that while the housing market has shown signs of recovery recently, it remains fragile and susceptible to external factors.
Overall, the latest data from Halifax and the government’s tax cut announcement have generated optimism in the UK housing market, with industry experts cautiously optimistic about the potential for growth and activity in the coming months.
