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

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%.

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.

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.

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.

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.