2024.01.0508:06:00UTC+00UK House Prices To Fall 2%-4% This Year: Halifax

UK house prices increased for the third successive month in December, largely reflecting a shortage of properties, while they are expected to slump this year, the results of a survey by the Lloyds Bank subsidiary Halifax and S&P Global showed on Friday.

House prices climbed 1.1 percent month-on-month in December, faster than the 0.6 percent increase in November. Economists had expected a modest 0.1 percent rise for the month.

Compared to the same month last year, house prices grew for the first time in eight months in December, rising 1.7 percent versus a 0.8 percent fall a month ago.

The average cost of an average UK home was GBP 287,105 in December, up by GBP 3,066 from November. This was the highest level since March.

The housing market beat expectations in 2023 and rose by 1.7 percent compared to 2022, the Halifax director said. The average property price is now GBP 4,800 higher than it was in December 2022.

Halifax expects house prices to fall between 2 percent and 4 percent during 2024, but added that the forecast uncertainty remains high given the current economic climate.

"The growth we have seen is likely being driven by a shortage of properties on the market rather than the strength of buyer demand," Halifax Mortgages Director Kim Kinnaird said.

"That said, with mortgage rates continuing to ease, we may see an increase in confidence from buyers over the coming months."

The larger economic instability will continue to be reflected in the UK housing market as 2024 progresses, and buyers and sellers will probably be understandably cautious when considering a move, Kinnaird observed.

"While wage growth is now above inflation, helping to ease cost of living pressures for some and improving housing affordability, interest rates are likely to remain elevated for as long as inflation remains markedly above the Bank of England's target," Kinnaird concluded.

Data showed that Northern Ireland continued to be the strongest-performing region in the UK, with house prices climbing 4.1 percent on an annual basis.

London retained the top spot for the highest average house price in the UK, at GBP 528,592. Nonetheless, prices showed an annual decline of 2.3 percent.