UK house prices reach record levels with demand set to continue
House prices have now reached record levels as lower mortgage rates have helped improve buyer confidence for the fifth month in a row.
According to the Halifax House Price Index, UK house prices rose 1.3 per cent in November, the biggest increase this year.
November’s increase pushed the annual growth rate up 4.8 per cent, the strongest level since 2022.
According to the lender’s data, a typical property in the UK is now worth £298,083.
The average house price in London rose 3.5 per cent to £545,439, as the capital once again retained its crown as having the highest average property prices in the UK.
Amanda Bryden, head of mortgages at Halifax, said: “Latest figures continue to show improving levels of demand for mortgages, as an easing in mortgage rates boost buyer confidence.
“However, despite these positive trends, many potential buyers and movers still face significant affordability challenges and buyer confidence may be tested against a changeable economic backdrop.”
House prices set to continue move higher
Bank of England figures late last month showed that the number of mortgage approvals rose to the highest level since August 2022 in October, suggesting buyer demand remains strong.
It marked the fifth straight monthly increase, suggesting a sustained recovery in longer-term borrowing.
According to Rightmove, the average two-year and five-year mortgage rate are now around 5.1 per cent and 4.8 per cent.
Demand will continue into the new year, Bryden said, especially as the market looks to employment figures and a decrease in interest rates.
Bryden added: “This should underpin further house price growth, albeit at a modest pace as borrowing costs remain above the average of a few years ago.”
Nigel Bishop of buying agency Recoco Property Search said the uptick in buyer demand has allowed sellers to achieve asking price.
However, he said there are still some “homeowners are experiencing seller fatigue after failing to sell earlier this year and are more open to lowering their asking price.”
“We therefore advise house hunters to conduct careful research of their chosen area’s property market as it could be very different from the national picture and give them the upper hand during price negotiations,” Bishop added.