UK house prices near 2022 peak after rising for fifth month in a row

According to Halifax, average UK house prices are now just £1,800 below their June 2022 peak, after rising 0.4% in February – the fifth consecutive month of gains.

The building society said property prices increased by 1.7% year-on-year, compared with 2.3% last month.

The average UK house price in February was £291,699, up around £1,000 on the previous month.

Kim Kinnaird, director of Halifax Mortgage, said the data “continues to point to a relatively stable start to 2024 and is consistent with other promising signs of increased housing activity such as mortgage approvals.”

“In fact, the current average price of a house is only around £1,800 below its peak in June 2022.

“While lower mortgage rates and expectations of a rate cut from the Bank of England this year should help buyer confidence in the short term, the trend in interest rates is showing signs of fading.”

Mr Kinnard said it was “still possible” the property market would slow down this year, even as wages continued to grow and inflation receded, raising deposits and paying large mortgage payments remained challenging.

London had the highest average house price at £536,996, up 1.5% last month, while the North East had the lowest average house price at £171,294, up 4.2%. The South East and East of England were the only regions to see price falls, down 0.6% and 0.8% respectively.

In Wednesday’s Budget, Chancellor Jeremy Hunt unveiled a number of property tax measures, including cutting the higher capital gains tax rate on residential properties from 28% to 24% from April 2024.

Budget documents say the moves will encourage landlords and second home owners to sell their properties, making more properties available for a variety of buyers, including those looking to get on the housing ladder.

Nicky Stevenson, managing director of estate agency group Fine & Country, said: “It will be interesting to see whether the capital gains tax breaks announced by the chancellor in the Budget will encourage shaky landlords to sell. Very interesting thing.

“The large number of new listings will inject more energy into the housing market and may reignite demand from first-time buyers who have struggled to afford a home in a high interest rate environment.”

Amy Reynolds, head of sales at London-based estate agent Antony Roberts, said: “After a relatively quiet 2023, the market continues to remain strong with a steady flow of committed buyers. There is a steady flow of inflows and serious applicants, which bodes well for the real estate market. The market is busy in the spring.”

Sam Mitchell, chief executive of Purplebricks, said: “The housing market has been on a positive trajectory in recent months, helped by the Bank of England’s continued interest rate hold and banks competing aggressively on mortgage rates. On the road to recovery, but that recovery remains fragile.”