May 31, 2023

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UK house prices rise for third month in March

2 min read

House prices rose in March for the third month in a row as an easing of mortgage rates drew buyers back into the market, data from Halifax shows.

Average house prices increased by 0.8 per cent last month, after a 1.2 per cent rise in February, according to the mortgage lender’s latest house price index. Year-on-year prices were 1.6 per cent higher.

The typical UK property now costs £287,880, against £285,660 the previous month.

Kim Kinnaird, director at Halifax Mortgages, said: “The UK housing market continues to show resilience following the sharp downturn at the end of 2022. 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.”

After a lockdown-induced boom that pushed prices to record highs, the market has gone into reverse in recent months. The cost of living crunch and fears of a recession hit consumer confidence, as did the uncertainty caused by the mini-budget in September, which resulted in a jump in mortgage rates. Borrowing costs have retreated since then.

The rate on an average five-year fixed mortgage in March last year was about 1.8 per cent. That rose to above 5.5 per cent after the mini-budget but is now around 4.8 per cent.

Kinnaird said the figures suggested relative stability in the housing market at the start of 2023 “characterised by a partial recovery in activity and transactions, especially when compared to the significant drops seen at the end of last year”.

The latest Bank of England data showed mortgage approvals rose in February for the first time since August, which economists said could be a sign that the “worst is in the past”. Mortgages approved for house purchases beat economists’ expectations to reach 43,500 in February, up from 39,600 in January.

Despite the rise in approvals, overall mortgage lending fell from £2 billion in January to £700 million in February, which,…

Business Matters

2023-04-06 05:22:37

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