House prices edged up in March, with the average home adding £2,000, Halifax says
House prices edged up in March, with the average property adding £2,000 – but Halifax warns of a “continued slowdown” this year
- The average house price in the UK is now £287,990, according to Halifax
- All countries and regions in the UK recorded house price growth in March 2023
- But there is expected to be a “prolonged slowdown” this year
Halifax says the property label is showing “resilient” as prices continue to rise slightly despite economic headwinds from high inflation and interest rates.
However, the lender warned of a “prolonged slowdown” in price growth this year as mortgage rates are unlikely to fall significantly.
The typical property is now £287,990, it says, up 0.8 per cent or £2,200 on last month but 2 per cent below the peak in August.
Annual prices rose 1.6 percent in March, compared to 2.1 percent in the previous three months.
In addition, property prices rose across all UK countries and regions over the past month.
The average house price in the UK is now £287,990, up £2,200 from last month
Kim Kinnaird, Director of Halifax Mortgages, said: “Overall, these latest figures continue to indicate relative stability in the housing market as we enter 2023 and are consistent with many other recent industry surveys and data.
‘This was marked by a partial rebound in activity and transactions, particularly compared to the significant declines late last year, with the latest Bank of England data showing that mortgage approvals rose for the first time in six months.’
Kinniard said lower mortgage rates in the early months of this year were the driving factor behind the improving picture as “the sudden increase in borrowing costs that we saw in November and December has now largely reversed”.
In October, average fixed interest rates peaked at 6.65 for a five-year and 6.52 for a two-year fix. According to Moneyfacts, five-year fixed rate contracts now average 5.04 percent. The average two-year fixed rate is now 5.35 percent.
This means someone taking out a new £200,000 mortgage over 25 years today with a two-year fixed contract would typically pay £143 less a month than someone fixing in October.
The latest figures from the Bank of England show that the number of approved mortgages for home purchases rose by 9.8 per cent to 43,536 in February 2023 compared to the previous month.
House price growth remained positive in March but has slowed from previous months
Regionally, Northern Ireland continues to post the strongest annual growth in house prices of 4.9 per cent with an average house price of £186,459. Next comes the West Midlands, where prices are up 3.8 per cent with an average house price of £248,308.
However, according to Kinniard, Halifax expects “a sustained slowdown this year.”
“While the path for interest rates is uncertain, mortgage costs are unlikely to get significantly cheaper in the short term and housing market developments will continue to reflect these new norms of higher borrowing costs and lower demand,” she added.
What to do if you need a mortgage
Borrowers who need to find a mortgage because their current fixed-rate deal is expiring or because they have agreed to buy a home should evaluate their options as soon as possible.
This is Money’s best mortgage rate calculator, powered by L&C and able to show you quotes that match your mortgage and property values
What if I need a debt restructuring?
Borrowers should compare interest rates and speak to a mortgage broker and be prepared to bargain to secure an interest rate.
Anyone with a fixed income deal that’s ending within the next six to nine months should assess how much it would cost them to refinance now — and consider starting a new contract.
Most mortgage deals allow fees to be added to the loan, which are then only charged upon closing. This allows borrowers to secure an interest rate without having to pay expensive brokerage fees.
What if I buy a house?
Those who have agreed to buy a home should also aim to secure the installments as soon as possible so they know exactly what their monthly payments will be.
Homebuyers should be wary of overstretching and be prepared for the possibility that home prices could fall from their current high levels as higher mortgage rates limit people’s ability to borrow.
How to compare mortgage costs
The best way to compare mortgage costs and find the right deal for you is to speak to a good broker.
You can use our best mortgage rate calculator to find offers that match your home value, mortgage size, term and fixed rate needs.
Note, however, that interest rates can change quickly. So if you need a mortgage, you should compare rates and then speak to a broker as soon as possible so they can help you find the right mortgage for you.
> Check out the best fixed-rate mortgages you can apply for