UK house prices slow to three-year low as cost of living crisis drags down London and South East property market
A ‘squeeze’ on household incomes has seen house price growth slow to its lowest level on record over the last three years, according to lender Halifax.
According to figures published in the Halifax House price index, growth dipped to 1.9 per cent in January down from 2.1 per cent in December.
“The rising cost of living and higher interest rates would lead to a slower housing market, particularly compared to the rapid growth of recent years,” said Kim Kinnaird, director, at Halifax Mortgages.
Kinnard, continued: “As we move through 2023, that trend is likely to continue as higher borrowing costs lead to reduced demand.”
Figures show that the South West of England saw annual house price growth slow considerably, now at 2.7 per cent compared to 6.0 per cent in December.
Additionally, the avenger house price is now at £298k falling slightly below the £300k average for the the first time since March last year.
In London, house prices fell from £541k to £530k in January, with annual house price inflation flat at 0.0 per cent compared to 2.9 per cent in December.
Kinnard, continued: “As we move through 2023, that trend is likely to continue as higher borrowing costs lead to reduced demand.
“For those looking to get on or up the housing ladder, confidence may improve beyond the near-term. Lower house prices and the potential for interest rates to peak below the level being anticipated last year should lead to an improvement in home buying affordability over time.”
Avinav Nigam, cofounder of real estate investment platform, IMMO, said: “The slowdown in annual house-price growth was expected.
“It reflects a combination of forces including reduced economic confidence, reduced affordability as a result of higher rates and stricter affordability ratios imposed by mortgage lenders, and the seasonal slowdown driven by practicalities, including fewer daylight hours for viewing properties.”