The UK housing market has shown signs of recovery in the last two months of 2023, as average house prices rose by 0.5% in November, following a 1.2% increase in October, according to the latest data from Halifax. The average UK house price was £283,615 in November, which was slightly higher than a year ago, but still below the peak of £303,000 reached in July 2022.
The rise in house prices was driven by strong demand from buyers, who were encouraged by the easing of mortgage rates and the extension of the stamp duty holiday until March 2024. Mortgage approvals reached their highest level since June 2022 in October, with 86,000 loans approved for house purchase, according to the Bank of England. The number of properties listed for sale also increased by 8% in November compared with October, according to Rightmove.
However, the outlook for the housing market remains uncertain, as the UK economy faces headwinds from rising inflation, supply chain disruptions and labour shortages. The Office for National Statistics reported that the UK economy grew by only 0.1% in the third quarter of 2023, the slowest pace since the first quarter of 2020. The unemployment rate also rose to 4.6% in the three months to September, up from 4.5% in the previous quarter.
Halifax managing director Russell Galley said: "The UK housing market has shown resilience in recent months, despite the challenging economic conditions and the end of the furlough scheme. The availability and affordability of mortgages have improved, which has boosted buyer confidence and activity. However, we expect house price growth to moderate in the coming months, as inflation pressures and interest rate expectations weigh on consumer sentiment and spending power."
In conclusion, the UK housing market has experienced a strong rebound in 2023, as mortgage rates have fallen to historic lows and buyer demand has surged.
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