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Halifax House Price Index: House Price Growth Strongest since 2004

Figures from the November edition of the Halifax House Price Index reveal that the UK’s house price growth it the strongest since 2004.

As reported last month, the average house price in the UK now exceeds a quarter of a million pounds, and that figure rose 1.2% from October to £253,243.

The rise in house prices brings great news for current homeowners looking to make a profit on their older homes. However, the staggering figures are not great reading for first-time buyers who now face a 7.6% increase in price compared to 2019.

Despite the higher prices, the RICS Residential Market Survey shows another strong month for housing market activity as new buyer enquiries displayed a net balance of +46% in October (slightly lower than the 52% in September).

As shown in the image above, housing stock has risen significantly compared to the same period last year, which has contributed to the highest level of mortgage approvals in 13 years.

According to figures from the Bank of England, the number of mortgages approved to finance house purchases was 51% above what it was in October last year.

Commenting on this month’s results, Russell Galley, Managing Director, Halifax, said: “House prices rose by more than 1% in November, adding almost £3,000 to the cost of a typical UK home.
At just over £253,000, the average property price has risen by more than £15,000 since June. In
percentage terms that equate to 6.5% – the strongest five-monthly gain since 2004.

“With mortgage approvals at a 13-year high, the current market continues to be shaped by a desire for
more space, the move from urban to rural locations and indications of a trend for more home working in the
future. And while industry data shows agreed sales and new instructions to sell fell to their lowest level in
the past five months, both remain at historically high levels and well above seasonal norms.

“As the March deadline for the stamp duty holiday approaches, properties sold to home-movers recorded a
much higher rate of annual house price inflation (+7.9%) than first-time buyers (+5.8%). It is interesting to
note that the stamp duty saving of £2,500 on a home costing £250,000 is now far outweighed by the
average increase in property prices since July.

“The housing market has been much more resilient than many predicted at the outset of the pandemic, and
indeed many households remain confident about further price growth next year. However, the economic
environment continues to look challenging. With unemployment predicted to peak around the middle of
next year, and the UK’s economy not expected to fully recover the ground lost over 2020 for a number of
years, a slowdown in housing market activity is likely over the next 12 months.”

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