The analysis found that house prices grew by 1.1 per cent in the month, to an average of £281,974. That comes after a drop of 0.3 per cent registered in September.
However, looking over an annual basis, house prices are down by 3.2 per cent.
Halifax suggested that the first-time buyer market is holding up better than other areas of property, since the annual rate of house price growth for such buyers is -2.4 per cent, a smaller fall than with the market generally over the last 12 months.
Regional differences
On a regional basis, the South East of England has seen the starkest falls. While all nations and regions of the UK have experienced price drops over the last year, the fall is sharpest in the South East at -6 per cent.
By contrast, prices in Scotland have been the most resilient, with prices down by just 0.2 per cent, while Northern Ireland has seen prices drop 0.5 per cent.
Kim Kinnaird, director of Halifax Mortgages, noted that sellers were taking a “cautious attitude”, which was leading to a low supply of homes for sale and in turn propping up prices.
She continued: “While many people will have seen their income grow through wage rises, higher interest rates and wider affordability pressures continue to be challenges for buyers.
“Across the medium-term, with financial markets not anticipating a decline in the Bank of England’s base rate soon, we expect house prices to fall further overall – with a return to growth from 2025.”
The Halifax study comes after the latest Nationwide house price index found prices grew by 0.9 per cent last month.
Lender confidence is growing
Lenders are “more confident” than they have been in some time, argued Mark Harris, chief executive of SPF Private Clients, while there is “much less volatility” in the swaps market.
He continued: “The second rate hold has increased speculation that base rate may have peaked, although even if this is the case, interest rates are unlikely to start declining for a while yet.
“Lenders continue to reduce their fixed rates, with five-year money available from 4.62 per cent, compared with two-year fixes of just over 5 per cent. Other lenders are enhancing and broadening criteria, which is a positive sign for the market and bodes well for coming months.”
Lack of supply boosting prices
Stephen Perkins, managing director of Yellow Brick Mortgages, said that the lack of supply was “pivotal” to these upticks in house prices, while demand is picking up as buyers “sense a bargain”.
He continued: “First-time buyers in particular are in a strong position and know that they hold a lot of bargaining power at present. The stupendously high cost of renting is also encouraging them to buy even though mortgage rates are much higher than what they are. Nobody is expecting a spectacular recovery in the property market but predictions of further drops of 10% and above are starting to ring hollow.”
Malcolm Davidson, director of UK Moneyman, suggested that few would have expected house prices to rise, and noted he was not seeing buyers waiting for prices to fall but rather for the return of lower fixed rate mortgages.
“Given that the Bank of England has stated twice in the past three months that interest rates are likely to remain high until inflation is well and truly behind us, that could well be a long wait,” he continued.
