Halifax: ‘House prices rise but it’s not due to buyer demand’

Houses prices stopped falling on a monthly basis for the first time since in six months during October but are still down annually, according to Halifax.

The lender attributed this to a lack of stock as sellers remain cautious.

The latest Halifax House Price Index recorded a shock monthly rise in average house prices by 1.1% in October but values still dropped 3.2% annually.

Despite weakness in overall buyer demand, the first-time buyer market has held up relatively well, according to Halifax.

The latest house price data shows prices for first-time buyers are down 2.4% annually.

The typical UK home now costs £281,974, according to Halifax.

All UK nations and regions saw house prices decline on an annual basis. The greatest fall was seen in South East England, where prices decreased by 6.0%.

Scotland’s annual house price was the most resilient, down just 0.2% annually, while London continues to have the highest average house price in the UK, at £524,057, falling 4.6% over the past 12 months.

It comes after the most recent Nationwide House Price Index also showed a monthly rise in house prices.

Kim Kinnaird, director of Halifax Mortgages, said: “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.”

Kinnaird said house prices are expected to fall further and return to growth in 2025.

Commenting on the figures, Jeremy Leaf, north London estate agent and a former RICS residential chairman, said: “Halifax may be the country’s largest lender with historically reliable mortgage approval trends in its market survey but lack of inclusion of cash buyers, who make up about 30% of the total, as well as borrowers from other lenders, means it tells only part of the story.

“On the ground, we are seeing more business than the Halifax suggests with those not dependent on finance in particular negotiating hard with serious sellers as successive interest rate rises have taken their toll on borrowers.

“However, we are not getting carried away with the modest rise in prices shown here. Transactions remain subdued so looking forward we don’t expect to see much improvement in the market until January or February of next year as the earliest.”