According to the Halifax HPI, the average house price stands at £283,615, which is around £1,300 more than last month.
On an annual basis, house prices fell by one per cent, which is a slowing compared to a 3.1 per cent annual fall in October.
Looking at a regional level, Northern Ireland performed the strongest with house prices rising by 2.3 per cent year-on-year to an average of £189,684.
Scotland’s annual growth was flat, with the average property costing £203,116.
Wales reported an annual fall of 1.5 per cent, with the average house price standing at £215,787.
Prices in the South East fell the most, with an annual fall of 5.7 per cent year-on-year to £373,943.
London has the highest average house price at £524,592, though prices have decreased by 3.8 per cent on an annual basis.
Halifax: ‘Prices have held up better than expected’
Kim Kinnaird, director of Halifax Mortgages, said: “Over the last year, despite the wider economic headwinds, property prices have held up better than expected, falling by a relatively modest one per cent on an annual basis, and still some £40,000 above pre-pandemic levels.
“The resilience seen in house prices during 2023 continues to be underpinned by a shortage of properties available, rather than any significant strengthening of buyer demand. That said, recent figures for mortgage approvals suggest a slight uptick in activity levels, which is likely as a result of an improving picture on affordability for homebuyers.”
She continued that with mortgage rates starting to ease this could be leading to “increased buyer confidence” with people “more inclined to push ahead with their home purchases”.
“However, the economic conditions remain uncertain, making it hard to assess the extent to which market activity will be maintained. Other pressures – like inflation, the broader cost of living, overall employment rates and affordability – mean we expect to see downward pressure on house prices into next year,” Kinnaird added.
Less volatility but demand still muted
Alan Davison, personal finance distribution director at Together, said that the latest figures show a continuing trend of slight house price rises in October, which suggest a “good chance that the property market may well hold tight in the coming months”.
He continued: “However, buyer demand remains weak because of increased borrowing costs and pressure on affordability, despite wage growth for many, and we’d expect this to remain the case as we head into 2024.
“Prospective home buyers and residential buy-to-let investors seem to be continuing a cautious approach, with many putting on hold their plans, instead waiting to see what happens with mortgage rates in the longer term.”
Davison said that many will be looking at the position that the Bank of England makes on the base rate next week, as this will impact their property plans in the next year.
Mark Harris, chief executive of mortgage broker SPF Private Clients, added that while lenders were looking out for potential headwinds that could impact mortgage pricing, there was more confidence in the market.
He added: “There is much less volatility in the cost of funds with swaps, which underpin the pricing of fixed-rate mortgages, continuing to edge downwards amid speculation that base rate has peaked and the next move will be a reduction.”
Harris said that five-year swaps were dipping below four per cent, which was a little higher than this time last year, but the “direction of travel for fixed-rate mortgages continues to be downwards”.
“Although borrowers need to get used to living in a higher-rate environment, with the days of sub-one per cent mortgages long gone, two and five-year fixes are now available from less than 4.5 per cent, which is starting to feel more palatable,” he noted.
