House prices rise nationally but dip in the West Midlands

THE housing market “beat expectations” in 2023, with the average UK property value ending the year £4,800 higher than it had been at the end of 2022, according to an index.

Property values increased by 1.7% on average across 2023, Halifax said.

However, prices in the West Miidlands fell 1.4%, with the average cost being £247,122.

Nationally, average house prices rose by 1.1% month-onmonth in December, the third monthly rise in a row.

The typical UK house price in December 2023 was £287,105, up from £282,305 in the same month a year earlier.

Kim Kinnaird, director at Halifax Mortgages, said: “The housing market beat expectations in 2023 and grew by 1.7% on an annual basis. The average property price is now £4,800 higher than it was in December 2022.

“Whilst it’s encouraging that we saw growth in the last three months of the year, this was preceded with property price falls for six consecutive months between April and September. The growth we have seen is likely being driven by a shortage of properties on the market, rather than the strength of buyer demand.

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

She continued: “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.

“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.

“Our latest forecast suggests house prices could fall between 2% and 4% during the coming year, although, as with recent years, forecast uncertainty remains high given the current economic climate.”

While some parts of the UK recorded house price rises last year, property values fell in other areas. In Northern Ireland, house prices increased by 4.1% annually, while in the South East of England, they fell by 4.5%.

Many lenders have been chopping fixed mortgage rates.

Mark Harris, chief executive of mortgage broker SPF Private Clients, said: “Increased competitiveness among lenders leads to lower mortgage rates and we find ourselves in the midst of a price war.

“With HSBC launching the headline-grabbing 3.94% five-year fix and reductions from Halifax, NatWest, TSB and other lenders, the gloves really are off.”