UK Halifax House Prices Rise More Than Forecast

(RTTNews) - UK house prices grew more than expected in January to hit a record high as buyer demand increased ahead of the stamp duty hike in April, mortgage lender Halifax said Friday.

House prices increased 0.7 percent in January from December, reversing a 0.2 percent drop in the previous month. The monthly growth was also faster than economists' forecast of 0.4 percent.

On a yearly basis, growth in house prices moderated to 3.0 percent from 3.4 percent in December. This was the slowest growth since last July. Average property prices hit a record GBP 299,138 in January.

Halifax Head of Mortgages Amanda Bryden said affordability is still a challenge for many prospective home buyers but the resilience of the market is noteworthy.

There was strong demand for new mortgages as first time buyers rushed to complete transactions to avoid the rise in stamp duty from April.

Despite geopolitical uncertainties and easing consumer confidence, other key indicators look fairly positive for the housing market, Bryden noted.

Halifax sees more rate cuts from the Bank of England this year. With household earnings set to continue outpacing inflation, financial pressure felt from the cost-of-living squeeze is set to ease, Bryden observed.

Mortgage rates are expected to hover between 4 percent and 5 percent in 2025, influenced by both global financial markets and domestic monetary policy.

However, Bryden said the fundamental issue in the housing market remains the lack of supply. This long-term trend, coupled with a gradual improvement in affordability, should support further modest house price growth in 2025.