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Property prices stalled in January as housing market slows
The average house price is now £12,500 below its peak in August last year
The average house price was unchanged between December and January, at £281,684, said Halifax.
The lender added that this represented a quarterly fall of -3.4% and an annual rise of just 1.9% – the lowest level recorded over the past three years.
The average house price is now £12,500 (-4.2%) below its peak in August last year, though it still remains £5,000 higher than in January 2022 (£276,483).
The rate of annual growth slowed in all nations and regions during January.
Kim Kinnaird, director of Halifax Mortgages, 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, particularly compared to the rapid growth of recent years. As we move through 2023, that trend is likely to continue as higher borrowing costs lead to reduced demand.
“For those looking to get on or up the housing ladder, confidence may improve beyond the near-term. 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.”
Helen Morrissey, senior pensions and retirement analyst at Hargreaves Lansdown, added: “House prices stabilised in January after two months of falls, as the market grinds to a halt. Annual house price growth has slowed right down and is now just 1.9% – the consensus of data from around the market seems to suggest we will soon be seeing annual price falls.
“It’s been a turbulent time for the property market with soaring inflation putting pressure on our finances while the turmoil caused by the mini-Budget sent buyers running for the hills. It looks like the pain may not be over yet, because the RICS survey results show demand continues to fall, while Bank of England figures reveal mortgage demand has dropped as low as when the market was effectively closed at the start of the pandemic.
“We are starting to see mortgage rates come down, but it may not be enough to tempt many would-be buyers into the market just yet.
