House prices rose by 1.1 per cent in December 2023, the third monthly rise in a row, data from Halifax has revealed.
Halifax's monthly House Price Index found the average house price increased to £287,105, an increase of over £3,000 on the average price recorded in November.
Halifax reported this represented a 1.2 per cent increase on a quarterly basis.
This latest monthly rise meant that 2023 ended with house prices up by 1.7 per cent compared with the start of the year.
Halifax Mortgages director, Kim Kinnaird commented that the house prices “beat expectations” in 2023 with this growth.
“The average property price is now £4,800 higher than it was in December 2022,” Kinnaird explained.
Additionally, while she acknowledged it is “encouraging” to see growth in the last three months of the year, Kinnard pointed out that 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.”
The year ahead
Halifax additionally provided some insight into what might happen in the property market in 2024, predicting that prices could fall by between 2 and 4 per cent.
However, the index did acknowledge that, similarly to recent years, forecast uncertainty “remains high” due to the current economic climate.
Kinnaird stated: “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.”
The index also revealed a regional disparity in house prices, finding that prices in the South East fell by the most during 2023 when compared to other UK regions, with homes selling for an average £376,804, a drop of £17,755.
On the other hand, Northern Ireland continues to be the strongest performing nation or region in the UK, with house prices increasing by 4.1 per cent on an annual basis.
Properties in Northern Ireland now cost on average £192,153, which is £7,595 higher than the same time in December 2022.
Additionally, Scotland’s average house price also recorded growth, rising to an average price of £205,170, an increase of 2.6 per cent, or £5,277 in cash terms, on an annual basis.
tom.dunstan@ft.com
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