As a result, annual house price growth stands at 1.9 per cent, though over the quarter prices dropped by an average of 3.6 per cent. It means that the typical home is worth £281,684.
The month of price stability comes after drops of 1.3 per cent in December and 2.4 per cent in November in previous Halifax indices.
On a regional basis, Wales saw its annual house price growth drop from from six per cent in December to two per cent, while the south west also saw growth slow sharply, from six per cent to 2.7 per cent.
In London, annual house price inflation is completely flat at zero per cent, though Halifax noted that the price of a typical London home is still around £250,000 above the national average.
The Halifax index follows data from Zoopla which suggested that demand from buyers has fallen, as they wait for house prices to drop further.
Kim Kinnaird, director of Halifax Mortgages, said that the expectation was that the squeeze on household incomes from the cost of living crisis and higher interest rates would result in a slower housing market.
She continued: “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.”
Palatable mortgage rates
Mark Harris, chief executive of SPF Private Clients, suggested the market is returning to “something closer to what we were used to pre-pandemic”.
He pointed to continued falls in fixed rate pricing, adding: “While the days of sub-one per cent fixes are long gone, rates are beginning to look more palatable for borrowers, which should be a welcome boost for the housing market and encourage more to take the plunge.”
“The markets have reacted favourably to the Prime Minister’s inflation-cutting pledge and while there may be further rate rises to come, base rate appears to be nearing its peak, which will be a comfort to borrowers.”
When will prices rebound?
Karen Noye, mortgage expert at Quilter, argued that while we are “still far from out of the woods”, the fact that the economy is in a more predictable shape is helping to drive demand up in the housing market.
She continued: “Although there have been damning predictions about the UK economy in comparison to its peers by the likes of the IMF, if there is only a very shallow recession, we should start to see house prices rebound as interest rates fall once the spectre of inflation has gone. It will still take some time but it’s likely house prices will be on an upward trajectory as and when people’s personal finances have recovered from the current shock.”
