According to the index, annual housing price growth in February was 2.1% for the third month in a row.
UK property values rose 1.1% month-on-month in February, accelerating from January’s 0.2% rise, Halifax said.
The average UK house price in February was £285,476.
London’s average house price fell by 0.9% last year, likely due to the capital’s high supply of flats, Halifax said.
After September’s small budget, mortgage rates rose last fall, and the mortgage market later showed signs of settling. An increase in the Bank of England’s base rate also put upward pressure on borrowing costs.
Kim Kinnaird, director of Halifax Mortgages, said: “The recent decline in mortgage rates, improved consumer confidence and stability in the labor market will no doubt help to stabilize prices after the fall seen in November and December.
“Nevertheless, although house values fell quarter-on-quarter (by 2.5%), underlying activity continues to show an overall downward trend.
“In cash terms, house prices are down around £8,500 (2.9%) from their peak in August 2022, but remain almost £9,000 above the average price seen at the start of 2022 and are still above pre-pandemic levels, which many means sellers keep. price increases during the pandemic.
“As median home prices remain high, housing affordability remains a challenge for many buyers.”
Nathan Emerson, chief executive of estate agents’ body Propertymark, said: “Year on year estate agents across the UK have seen a slight fall in the number of agreed sales, while the number of new properties coming to the market has remained flat.
“Rising interest rates have caused buyers to reconsider their budgets and negotiate on price, but the drive to see their purchases through and move into a home is still likely.”
Tom Bill, head of UK housing research at estate agent Knight Frank, said: “The UK housing market is emerging at the end of a long period of low-budget stagnation rather than on the eve of a price collapse.
“There was a lull in activity before Christmas due to the mortgage market turmoil, but activity has picked up this year as people come to an agreement on where rates will settle.”
Marie Johnstone, managing director of Edinburgh-based estate agents Wilson Property Group, said: “February was a much busier month than January.”
Mark von Grundherr, director of estate agents Benham & Reeves, said: “Current house price performance may remain sluggish compared to the meteoric pace of the pandemic market boom, but 2023 has seen a significant uptick in activity and reversed the rot. observed at the end of last year.
James Forrester, managing director of estate agent Barrows & Forrester, said: “The housing market will remain stable in 2023 and the overall economic outlook will be much more positive than expected.”
Mark Harris, chief executive of mortgage broker SPF Private Clients, said: “Lenders continue to jockey for position, increasing the price of their cheapest five-year fixes.
“However, even with another base rate hike this month, expectations are growing that rates will remain close to their peak and the outlook for borrowers will be brighter if inflation continues to decline.”
Here are UK house prices and year-on-year changes, according to Halifax. Annual changes for UK regions and countries are based on approved mortgage transaction data for the most recent three months.
– East Midlands, £234,749, 2.4%
– East Anglia, £331,442, 1.4%
– London, £526,842, minus 0.9%
– North East, £163,953, 1.1%
– North West, £221,306, 3.7%
– Northern Ireland, £185,009, 5.7%
– Scotland, £198,779, 2.2%
– South East, £387,205, 1.7%
– South West, £298,939, 1.4%
– Wales, £210,917, 1.2%
– West Midlands, £246,351, 5.0%
– Yorkshire and Humber, £200,634, 3.6%