# UK house prices stabilise after four-month fall, Halifax says
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2023-02-07
Category: FINANCE
Category URL: https://financedigest.com/category/finance
Meta Title: UK House Prices Stay Flat in January Amid Rising Interest
Meta Description: Looking to get on the housing ladder? Explore how stagnant house prices and rising interest rates are impacting the UK market in 2023. Find out more.
URL: https://financedigest.com/uk-house-prices-stabilise-after-four-month-fall-halifax-sayshtml

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LONDON (Reuters) – British house prices were unchanged in January after falling in month-on-month terms in each of the previous four months as borrowing costs rose, mortgage lender Halifax said on Tuesday.

The annual rate of house price growth slowed to 1.9%, the weakest increase in three years, Halifax said.

Britain’s housing market saw a surge in demand from buyers during the coronavirus pandemic but a sharp rise in interest rates over the past year and the squeeze on households’ budgets caused by high inflation has hit the momentum.

Kim Kinnaird, a director at Halifax Mortgages, said the [trend of higher borrowing costs](https://www.financedigest.com/five-cost-of-living-trends-expected-in-2023.html "Five cost of living trends expected in 2023") hitting demand was likely to continue in 2023.

For those looking to get on or up the housing ladder, [confidence may improve](https://www.financedigest.com/weary-wall-street-cheers-improved-consumer-confidence.html "Weary Wall Street cheers improved consumer confidence") beyond the near term,” she said.

Lower [house prices](https://www.financedigest.com/buy-off-plan-to-beat-stalling-house-prices-and-falling-rental-yields-says-jean-liggett.html "“Buy off-plan to beat stalling house prices and falling rental yields” says Jean Liggett ") 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.

In London, where the [housing market](https://www.financedigest.com/uk-housing-market-weakness-continues-improvement-on-the-horizon-rics.html "UK housing market weakness continues, improvement on the horizon – RICS") has underperformed those of other regions of the country, prices in January were unchanged from the same month last year after rising by nearly 3% in the 12 months to December, Halifax said.

Rival mortgage lender Nationwide said last week its measure of house [prices dropped by a bigger-than-expected 0.6% in January](https://www.financedigest.com/uk-shop-price-inflation-hits-record-8-in-january-brc.html "UK shop price inflation hits record 8% in January: BRC") and was 3.2% below its peak in August.

As well as the [Bank of England’s increases in interest rates](https://www.financedigest.com/bank-of-england-officials-split-over-future-path-for-rates.html "Bank of England officials split over future path for rates") since December 2021, there was a major disruption to the mortgage market in late September and October following former prime minister Liz Truss’s “mini budget.

Mortgages approved in December fell to their lowest since the 2008-09 global financial crisis, excluding the start of the [COVID-19 pandemic when there were strict lockdown restrictions](https://www.financedigest.com/pandemic-restrictions-that-hampered-the-circulation-of-viruses-other-than-covid-19.html "Pandemic restrictions that hampered the circulation of viruses other than COVID-19"), the BoE said last week.

Martin Beck, an economist with forecaster EY Item Club, said January’s flat-lining of prices, as recorded by Halifax, might prove only a temporary pause in a trend of [falling prices](https://www.financedigest.com/syngenta-4q-profit-falls-as-raw-material-prices-increase.html "Syngenta 4Q profit falls as raw material prices increase").

Although mortgage [rates have dipped from post-mini-Budget peaks](https://www.financedigest.com/bank-of-england-set-to-hike-to-4-as-rate-peak-looms.html "Bank of England set to hike to 4% as rate peak looms"), they’re still at their highest in a decade,” he said.

(Writing by William Schomberg; graphic by Sumanta Sen; editing by Sarah Young and Arun Koyyur)


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