UK house prices have defied the widespread predictions of a crash, with the latest figures for February indicating that they have risen by 1.1% when compared to January. The Guardian reports that as fears of a prolonged recession have eased, the housing market has shown resilience.
Mortgage rates have now largely fallen to between 4% and 5%, after spiking to over 6% last September in the wake of Liz Truss’s surprise mini-budget which panicked the markets. This has helped to increase affordability and buying power for thousands of new mortgage seekers.
Kim Kinnaird, the director of Halifax Mortgages, told the publication: “Recent reductions in mortgage rates, improving consumer confidence, and a continuing resilience in the labour market are arguably helping to stabilise prices following the falls seen in November and December.”
Although average house prices have fallen overall since last August, they still remain well above pre-pandemic levels.
Tom Bill, the head of UK residential research at the estate agents Knight Frank, said: “The UK housing market appears near the end of a long hangover from the mini-budget rather than on the verge of a price plunge.”
He added: “Activity stopped well before Christmas due to the mortgage market turmoil but has picked up this year as people come to terms with where rates are settling.”
“That said, asking prices are likely to come under more pressure as we enter the traditionally busier spring market due to tighter affordability. We expect about half of the 20% increase seen during the pandemic to unwind but most evidence … points to a stronger market than expected.”
The more favourable economic conditions will be welcome news for first time buyers and those who are seeking a remortgage deal this year.
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