House price growth slows again to 1.9% in January, says Halifax, as Britain’s biggest lender says mortgage crunch is hitting the property market

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  • Prices have fallen 3.6% over the past three months due to a slowdown in activity.
  • Prices on a monthly basis remained unchanged after falling in December and November.
  • How much will it cost you to move home? Check out the best mortgage rates

According to the largest British mortgage lender Halifax, the slowdown in house prices continued into the New Year, as inflation in the housing market fell to just 1.9%.

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House prices were flat for the month, but property inflation eased from 2.1% in December and fell from a peak of 12.5% ​​last summer, according to the latest Halifax House Price Index.

Halifax warned that the real estate market will continue to suffer this year as higher mortgage rates and tight household budgets take their toll.

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The median UK home price is now £281,684, up £5,000 from a year ago but £12,308 less than August’s peak of £293,992.

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The average UK home now costs £281,684, according to Halifax.

Kim Kinnaird, director of Halifax Mortgages, said: “We expected the decline in household income due to rising living costs and higher interest rates to slow down the housing market, especially compared to the rapid growth in recent years.

“As we approach 2023, this trend is likely to continue as higher borrowing costs lead to lower demand.

“For those looking to move up or climb the corporate ladder, confidence may improve soon. Lower home prices and the likelihood that interest rates will fall below the level expected last year should lead to increased affordability of home purchases over time.”

Most parts of the UK experienced a slowdown in growth. In Wales, which has seen strong growth over the past few years, its rate fell 4 percentage points to 2 percent from 6 percent last month.

But in London, which remains one of the least affordable parts of the country, the average house price has fallen by £11,396 in a year.

On a monthly basis, prices have not changed, but fell in the quarter

On a monthly basis, prices have not changed, but fell in the quarter

Jeremy Leaf, a north London real estate agent and former chairman of RICS housing, said: “Since the beginning of the year, buyers and sellers have gradually adjusted to the changed environment.

“Buyers are in tough negotiations, especially the significant number of those who are heavily dependent on equity or not even dependent on mortgage financing, so will not show up in these numbers.

“Looking ahead, we expect small ups and downs in prices, but do not expect a major correction, especially now that more stocks are becoming available.”

More good news for borrowers is that mortgage rates have continued to fall since the beginning of the year, despite the Bank of England’s base rate hitting 4%, a 14-year high.

And while the rate is expected to continue rising to a spring peak, analysts say rates will continue to fall after a sharp rise in October last year.

What to do if you need a mortgage

Borrowers who need to find a mortgage because their current fixed-rate deal is coming to an end or because they have made arrangements to buy a home should explore their options as soon as possible.

This is Money’s best L&C-based mortgage rate calculator that can show you deals that match your mortgage and property value.

What if I need to re-mortgage?

Borrowers should compare rates and speak with a mortgage broker and be prepared to act to secure the rate.

Anyone with a fixed rate deal ending within the next six to nine months should figure out what it would cost them to remortgage now and consider doing a new deal.

Most mortgage deals allow you to add fees to the loan, and they are charged only when you receive it. By doing this, borrowers can secure the rate without paying expensive arranging fees.

What if I buy a house?

Those with a house purchase arrangement should also aim to secure rates as soon as possible so they know exactly what their monthly payments will be.

Homebuyers should beware of overstretching and be prepared for home prices to fall from their current high levels as higher mortgage rates limit people’s ability to borrow.

How to compare mortgage rates

The best way to compare mortgage rates and find the right deal for you is to talk to a good broker.

You can use our best mortgage rate calculator to show you offers that match your home’s value, mortgage size, term, and fixed rate.

Be aware, however, that rates can change quickly, so the advice is that if you need a mortgage, compare rates and then talk 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

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