Comment on Halifax data showing a 1.7% annual rise in house prices

The latest Halifax house price index reveals several trends in the UK property market:

  1. Overall Growth: Average house prices rose by 0.4% in February, marking the fifth consecutive monthly increase. However, the annual growth rate has slowed slightly to 1.7% compared to 2.3% in January.
  2. Regional Variations:
    • Northern Ireland: Leading in performance, with house prices increasing by 5% annually. The average price in Northern Ireland is now £195,956.
    • North West, North East, and Wales: Also experiencing strong annual growth rates of 4.4%, 4.2%, and 4.1% respectively.
    • London: Despite being the region with the highest average house price (£536,996), it has seen a modest increase of 1.5% annually, the first positive growth since January 2023.
    • Eastern England: Witnessed a decline in property prices, with homes selling for an average of £329,927, down 0.8% compared to the previous year.
  3. Market Trends: The ongoing increase in house prices in several regions indicates continued demand in the housing market. However, the variations across regions suggest localized factors influencing property prices, such as economic conditions, housing supply, and demographic changes.

Overall, while some regions continue to experience robust growth, others face challenges, reflecting the diverse nature of the UK property market.

 

Commenting on UK house prices showing an annual rate of growth of 1.7% in February according to Halifax data, Tom Brown, Managing Director, Real Estate at Ingenious, said: “The UK property sector continues to demonstrate its resilience and popularity in the face of high inflation and higher borrowing rates. Nationally, there remains a significant shortage of housing inventory across most locations and price points. Consequently, any slow-down in sales volumes from homeowners is likely to be offset by increased demand from renters and investors.

“However, it’s essential to note that the situation is not uniform throughout the country and across all price ranges. When analysing opportunities, it is key to understand the underlying subsectors and regional dynamics. Taking too broad a view of the market can be misleading. For instance, the institutional housing sector has experienced fewer disruptions compared to the residential sector due to its long-term investment horizon, rental growth and substantial capital inflows.

 “We are continuing to work with borrowers and investors and delivering for them. The dynamic landscape of the markets that we serve, and the wider economy requires us to evolve to stay relevant in addressing diverse challenges including the climate crisis, and changes in the way we are all living. Ingenious is broadening the reach of our widely embraced development lending product. This expansion aims to offer extended terms for stabilisation to specialised developers within the rental sectors. Additionally, special lending terms will be introduced for developers with a specific focus on minimising embedded carbon in their construction practices.”

 

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