The average house price in the UK rose by 2.5% for the year to January 2024 and we the 4th consecutive rise with prices climbing 1.3% in January alone.
According to the Halifax Property Index:
Following a difficult year with prices subdued due to higher mortgage interest rates, average wages are now climbing at a faster rate than inflation and with mortgage rates coming slightly down as competition for market share increases, the knock-on effect is price rises.
Kim Kinnaird, Director, Halifax Mortgages, added:
“However, while housing activity has increased over recent months, interest rates remain elevated compared to the historic lows seen in recent years and demand continues to exceed supply. For those looking to buy a first home, the average deposit raised is now £53,414, around 19% of the purchase price. It’s not surprising that almost two thirds (63%) of new buyers getting a foot on the ladder are now buying in joint names.
“Looking ahead, affordability challenges are likely to remain and further modest falls should not be ruled out, against a backdrop of broader uncertainty in the economic environment.”
In the words of Mark Twain “Buy land, they’re not making anymore”. We are ‘still not out of the woods yet’, affordability remains a concern and there are still millions of mortgage holders yet to remortgage to higher rates as their fixed rate deals come to an end in 2024.
There is still a housing crisis, there is still demand outstripping supply with the population still set to increase, according to the Office for National Statistics UK, from a population of 69 million currently to 73.7 million by mid-2036 and to 76.6 million by mid-2046. The demand for land and property in the UK is unlikely to fall.
This will also make happy reading for the government with revenues for Stamp Duty, Capital Gains Tax, Inheritance Tax, Annual Taxes on Enveloped Dwellings (ATED) and government equity shares in Help to Buy schemes as well as any new 99% loan to value mortgage deals (if they come), set to climb ever higher.