As we step into the new year, the UK housing market is off to a promising start, with January 2024 witnessing a surge in house prices. According to recent data from Halifax, the average house prices in the UK rose by 1.3% in January, marking the fourth consecutive monthly increase. This upward trend has contributed to a significant annual growth rate of 2.5%, the highest since January 2023. As a result, the typical UK home now commands a price tag of £291,029, representing an increase of over £3,700 compared to December 2023.

Housing Activity: Insights from Recent Data

Recent data on housing activity provides further insights into the state of the market. While HMRC’s monthly property transaction data indicates a slight decrease in UK home sales in December 2023, the number of mortgages approved for house purchases saw a notable increase of 2.3% during the same period. The Royal Institution of Chartered Surveyors (RICS) Residential Market Survey also reports a gradual improvement in buyer enquiries, agreed sales, and new instructions.

Kim Kinnaird, Director of Halifax Mortgages said, “The recent reduction of mortgage rates from lenders as competition picks up, alongside fading inflationary pressures and a still-resilient labour market has contributed to increased confidence among buyers and sellers. This has resulted in a positive start to 2024’s housing market.

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: Challenges and Opportunities

As we look ahead, affordability challenges are expected to persist, and further fluctuations in house prices cannot be ruled out. This comes against the backdrop of broader economic uncertainties.

However, the positive start to 2024, fuelled by factors such as reduced mortgage rates and increased buyer confidence, sets a hopeful tone for the UK housing market in the months to come.

About Lansdown Insurance Brokers

Lansdown Insurance Brokers are specialists in Landlords Insurance, Block of Flats Insurance and Home Insurance. We can provide flexible policies to suit individual client needs and provide advice on what cover is required. For more information call the team on 01242 524498.

Lansdown is part of the Benefact Group, a charity-owned, international family of financial services companies that gives all available profits to charity and good causes.

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