UK house prices rise as mortgage rate cuts lift confidence

theguardian.com:

UK house prices picked up in February from the previous month as recent reductions in mortgage rates helped to stabilise the market, according to the lender Halifax.

The average house price rose 1.1% to £285,476 last month compared with January, in a sign of resilience amid hopes the broader economic downturn will not be as severe as previously feared.

It followed a monthly gain in house prices of 0.2% in January and a fall of 1.3% in December, according to Halifax, which is part of Lloyds Banking Group. The annual growth rate remained at 2.1% for a third month.

“Recent reductions in mortgage rates, improving consumer confidence, and a continuing resilience in the labour market are arguably helping to stabilise prices following the falls seen in November and December,” Kim Kinnaird, the director of Halifax Mortgages, said.

House prices are down by about £8,500, or 2.9%, on the August peak but remain almost £9,000 above the average prices seen at the start of 2022 and are still above pre-pandemic levels, Kinnaird added. “With average house prices remaining high, housing affordability will continue to feel challenging for many buyers.”

Tom Bill, the head of UK residential research at the estate agents Knight Frank, said: “The UK housing market appears near the end of a long hangover from the mini-budget rather than on the verge of a price plunge. Activity stopped well before Christmas due to the mortgage market turmoil but has picked up this year as people come to terms with where rates are settling.

“That said, asking prices are likely to come under more pressure as we enter the traditionally busier spring market due to tighter affordability. We expect about half of the 20% increase seen during the pandemic to unwind but most