UK house prices rose unexpectedly for a third month in a row

According to the latest housing report from Halifax bank, the UK housing market shows resilience, recording growth of 0.8% in March 2023. This follows previous increases of 0.2% in January and 1.2% in February. This increase in the average house price defied economists’ expectations of a 0.3% fall. And further assures investors and buyers that the UK market remains strong and resilient. Halifax also notes that: “The principal factor behind this improved picture has been an easing of mortgage rates. The sudden spike in borrowing costs that we saw in November and December has now been largely reversed, and while rates remain much higher than the average of the last decade, across the industry a typical five-year fixed rate deal (75% LTV) is down by more than 100 basis points over the last few months.”

Similar data from Nationwide, the UK’s largest building society, last week suggested that house prices were to fall at their fastest rate since the global financial crisis in 2009. However, despite the pressures on potential buyers, average prices have remained near the record levels of last year, albeit after a small dip in November, December, last year.

A rise in mortgage approvals in February and better survey data on transactions of late suggests that weakness in housing market activity may have bottomed out. The UK economy is showing increased signs of health, aided by falling energy prices, with job creation continuing at a solid pace and consumer confidence recovering.