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House prices rose 1.3 per cent in January

House prices rose 1.3 per cent in January
Christina Hoghton
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Christina Hoghton

UK property prices rose for the fourth month in a row, according to Halifax.

The UK’s largest lender said that house prices rose 1.3 per cent – or £3,900 – in January, to reach £291,029.

Property prices also rose on an annual basis, by 2.5 per cent, which is the highest annual growth recorded since January 2023.

Kim Kinnaird, director of Halifax Mortgages, said: “The recent reduction of mortgage rates from lenders as competition picks up, alongside fading inflationary pressures and a still-resilient labour market has contributed to increased confidence among buyers and sellers.

“This has resulted in a positive start to 2024’s housing market.

“However, while housing activity has increased over recent months, interest rates remain elevated compared to the historic lows seen in recent years and demand continues to exceed supply.

“Looking ahead, affordability challenges are likely to remain and further modest falls should not be ruled out, against a backdrop of broader uncertainty in the economic environment.”

Alice Haine, personal finance analyst at Bestinvest, agreed: “The average two- and five-year fixed rate mortgages have dropped by more than one percentage point since the beginning of August delivering a welcome boost to the market.

“While first-time buyers can certainly feel cheery, as they have a better chance of securing a mortgage for their desired home, the picture is less rosy for those emerging from cheaper fixed-rate deals secured before the Bank of England’s rate-hiking cycle began in late 2021.”

Remortgage woes

Haine continued: “The 1.6 million borrowers emerging from fixed-rate products this year will undoubtedly face a jump up in repayments when they secure a fresh deal unless they have managed to dramatically pay down their mortgage during their current term.”