According to the latest data from Halifax, UK house prices have experienced a 1.7% annual surge, bringing the average cost of a UK house remarkably close to the peak recorded in 2022.
UK House Prices Nearing 2022 Peak, Halifax Reports
Halifax reports that the average UK property price is currently only £1,800 below the peak set in June 2022 after rising by 0.4% in February, the fifth consecutive month of increases.
The construction society said that, on a yearly basis, property prices increased by 1.7% as opposed to 2.3% the month before.
February saw an average UK property price of £291,699, which was almost £1,000 higher than the month prior.
Kim Kinnaird, director, Halifax Mortgages, remarked the figures “continue to suggest a relatively stable start to 2024 and align with other promising signs of increased housing activity, such as mortgage approvals.
“In fact, the average price tag of a home is now only about £1,800 off the peak seen in June 2022.
“Although lower mortgage rates, alongside expectations of Bank of England interest rate cuts this year, should help buyer confidence in the short term, the downward trend on rates is showing signs of fading.”
According to Kinnaird, a decrease in housing prices "remains a possibility" this year because it is still difficult to raise a deposit and manage a sizable mortgage, even with rising incomes and declining inflation.
At £536,996, up 1.5% from a year ago last month, London has the most expensive average property price, while the northeast has the lowest, at £171,294, up 4.2%. Prices barely decreased in the southeast and eastern regions of England, by 0.6% and 0.8%, accordingly.
Chancellor's Tax Cut Spurs Optimism for Housing Market
Jeremy Hunt, the chancellor, outlined many property tax adjustments in Wednesday's budget, one of which is a reduction of the greater percentage of capital gain taxes on houses from 28% to 24% starting in April 2024.
According to budget documents, the actions would incentivize second homeowners and landlords to sell their homes, increasing the number of properties available for a range of buyers, including those looking to climb up the housing ladder.
"It will be interesting to see whether the chancellor's capital gains tax cut announcement in the budget encourages teetering landlords to sell their properties," stated Nicky Stevenson, managing director of estate agency business Fine & Country.
“A rush of new listings would inject more energy into the housing market and may reignite demand from first-time buyers who have been struggling to afford a home in this high interest rate environment.”
Amy Reynolds, head of sales at London-based estate agent Antony Roberts, highlighted: “The market continues to pick up momentum after a relatively quiet 2023, with a flow of committed buyers and a strong pipeline of serious applicants, which bodes well for a busy spring market.”
Sam Mitchell, chief executive of Purplebricks, added: “The housing market has been on the path to recovery in recent months, helped along by consecutive holds on interest rates from the Bank of England and banks actively competing on mortgage rates, but this recovery remains fragile.”