House prices stall in cost-of-living crisis

Average house prices are now more than £12,000 below the level they peaked at in August, according to new figures.

TheHalifaxmonthlyprice tracker said the typical property value remained largely unchanged in January – following monthly decreases of 1.3% in December and 2.4% in November.

That means propertyvalues,on average, increased by 1.9% annually - the lowest level recorded in three years.

In August, the average UK house price was £293,992.

In the North East, the average house price in the North East was £164,730 – an increaseof3.1%overtheyear.

Kim Kinnaird, director, HalifaxMortgages,said:"The average house price is now around £12,500 (4.2%) below its peak in August, though it still remains some £5,000 higher than in January 2022.

He said: "We expected that the squeeze on household incomes from the rising cost-of-living and higher interest rates would lead to a slower housing market.

"As we move through 2023, that trend is likely to continue as higher borrowing costs lead to reduced demand. Lower house prices and the potential for interest rates to peak below the level being anticipated last year should lead to an improvement in home buying affordability over time."

Tom Bill, head of UK residential research at estate agent Knight Frank, said: "Somediscretionarydemand has disappeared but most buyers need to move and have accepted the fact that a 13-year period of ultra-low rates is over. We think prices will fall by 5% this year but offers are still exceeding the asking price in some areas."