UK house prices rose in October for first time since March – business live | Business
Introduction: Halifax reports rise in house prices
Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.
UK house prices rose in October for the first time since March, amid a shortage of properties available, but remain lower than a year ago.
The latest house price index from Halifax shows that the average house price rose by 1.1% in October, following a 0.3% drop in September. That’s the first monthly increase since March.
That lifted the price of the average house sold to £281,974, an increase of around £3,000 over the month.
But on an annual basis, property prices are now 3.2% lower than a year ago, compared with a 4.5% fall in the year to September, with prices down sharpest in South East England.
This calming of the market comes as mortgage rates have fallen from their peaks last summer, as UK inflation has fallen back.
Kim Kinnaird, director at Halifax Mortgages, explains that a shortage of properties on the market is supporting prices:
“Prospective sellers appear to be taking a cautious attitude, leading to a low supply of homes for sale. This is likely to have strengthened prices in the short-term, rather than prices being driven by buyer demand, which remains weak overall. 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 current picture should continue to be seen in the context of the longer-term house price trend as, on average, prices remain around £40,000 above pre-pandemic levels.”
🇬🇧 UK house prices rise in October for first time since March: Halifax
Halifax House Price Index (MoM)
Actual: 1.1% 🟢
Expected: 0.2%
Previous: -0.3%(YoY)
Actual: -3.2%
Previous: -4.5%(Reuters) – British house prices ended six months of consecutive falls in October,… pic.twitter.com/JVXGhKYcui
— PiQ (@PiQSuite) November 7, 2023
Halifax’s report matches the messages from rival lender Nationwide last week; they also reported a surprise increase in house prices in October:
Borrowers could also benefit from a drop in UK interest rates next year.
Last night, the Bank of England’s chief economist, Huw Pill, predicted that rates could start to fall in the middle of 2024.
Also coming up today
Wall Street is digesting the collapse of WeWork, the once high-flying startup which filed for Chapter 11 bankruptcy overnight.
The debt-laden company is entering a restructuring support agreement with stakeholders to drastically reduce its existing borrowing, having struggled to recover from the pandemic.
Investors in the UK will have an eye on parliament, where King Charles will lay out the government’s legislative plans for the new parliament.
We’re expecting a new annual system for awarding oil and gas licences, and moves to prioritise motorists.
The agenda
-
7am GMT: Halifax house price report
-
7am GMT: German industrial production
-
8.30am GMT: Eurozone construction PMI
-
10am GMT: Eurozone PPI index of producer price
-
1.30pm GMT: US trade report for September
Key events
Alice Haine, personal finance analyst at investment platform Bestinvest, says the pick-up in house prices is largely driven by sellers remaining cautious about listing their property when they fear they cannot secure the price they want.
Haine adds:
The housing market is likely to remain downbeat going into the new year as the drag effect from the Bank of England’s 14 interest rate hikes between December 2021 to August this year continues to filter through to the mortgage market, with many buyers downsizing the size and value of the home they purchase to meet lenders’ affordability criteria.
The Bank of England’s decision to hold interest rates for the second time in a row last week should help stabilise the housing market.
Nicky Stevenson, managing director at national estate agent group Fine & Country, explains:
“Steady buyer demand has helped to provide a cushion against month-on-month price falls, and the housing market remains in a relatively stable position.
“There are more promising signs ahead thanks to the recent pauses in interest rate rises.
“Many buyers searching for their next home need stability in the mortgage market so they can trust that their affordability won’t change substantially while they’re viewing properties — and the Bank of England has now provided that extra dose of confidence.
Here’s a chart breaking down the UK housing market by region:
Overall, Halifax says, the housing market remains “subdued”, with October seeing the first rise in the cost of a typical UK home since March.
They add:
Despite weakness in overall buyer demand, the first-time buyer market has held up relatively well. Buying a first home remains attractive for many, especially against the backdrop of rental prices increasing.
The latest house price data shows prices for first-time buyers are down -2.4% annually, a notably smaller fall than the market generally (-3.2%), over the past year.
House prices down in last year across UK nations and regions
On an annual basis, house prices fell on an annual basis in all UK nations and regions in October, Halifax says.
The greatest fall was seen in South East England, where prices decreased by -6.0% over the last year (taking the average house price down to £374,066).
In London, prices are down by 4.6% over the last year, putting the average house price in the capital at £524,057 (the highest of any UK region).
In Scotland, prices fell by 0.2% over the last 12 months, while prices in Northern Ireland are down 0.5%, and they dropped by 3.9% in Wales over the last year.
The autumn bounce after a sticky summer saw avg house prices rise 1.1% on Sep in Oct 23 making the avg property worth £281,974. Annually thou all UK nations & reg’s were on avg ⬇️ -3.2, the South East was hit hardest -6% whilst Scotland showed resilience at -0.2% @HalifaxBank pic.twitter.com/Mq8BQUwcpB
— Emma Fildes (@emmafildes) November 7, 2023
Introduction: Halifax reports rise in house prices
Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.
UK house prices rose in October for the first time since March, amid a shortage of properties available, but remain lower than a year ago.
The latest house price index from Halifax shows that the average house price rose by 1.1% in October, following a 0.3% drop in September. That’s the first monthly increase since March.
That lifted the price of the average house sold to £281,974, an increase of around £3,000 over the month.
But on an annual basis, property prices are now 3.2% lower than a year ago, compared with a 4.5% fall in the year to September, with prices down sharpest in South East England.
This calming of the market comes as mortgage rates have fallen from their peaks last summer, as UK inflation has fallen back.
Kim Kinnaird, director at Halifax Mortgages, explains that a shortage of properties on the market is supporting prices:
“Prospective sellers appear to be taking a cautious attitude, leading to a low supply of homes for sale. This is likely to have strengthened prices in the short-term, rather than prices being driven by buyer demand, which remains weak overall. 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 current picture should continue to be seen in the context of the longer-term house price trend as, on average, prices remain around £40,000 above pre-pandemic levels.”
🇬🇧 UK house prices rise in October for first time since March: Halifax
Halifax House Price Index (MoM)
Actual: 1.1% 🟢
Expected: 0.2%
Previous: -0.3%(YoY)
Actual: -3.2%
Previous: -4.5%(Reuters) – British house prices ended six months of consecutive falls in October,… pic.twitter.com/JVXGhKYcui
— PiQ (@PiQSuite) November 7, 2023
Halifax’s report matches the messages from rival lender Nationwide last week; they also reported a surprise increase in house prices in October:
Borrowers could also benefit from a drop in UK interest rates next year.
Last night, the Bank of England’s chief economist, Huw Pill, predicted that rates could start to fall in the middle of 2024.
Also coming up today
Wall Street is digesting the collapse of WeWork, the once high-flying startup which filed for Chapter 11 bankruptcy overnight.
The debt-laden company is entering a restructuring support agreement with stakeholders to drastically reduce its existing borrowing, having struggled to recover from the pandemic.
Investors in the UK will have an eye on parliament, where King Charles will lay out the government’s legislative plans for the new parliament.
We’re expecting a new annual system for awarding oil and gas licences, and moves to prioritise motorists.
The agenda
-
7am GMT: Halifax house price report
-
7am GMT: German industrial production
-
8.30am GMT: Eurozone construction PMI
-
10am GMT: Eurozone PPI index of producer price
-
1.30pm GMT: US trade report for September
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