House price growth slowed to 1.9% in January taking the average house price in the UK to £281,684

House price growth slows again to 1.9% in January, says Halifax, taking average UK property price to £281,684

  • Prices fell 3.6% over the past three months as activity slowed
  • Month-on-month prices remained flat after dipping in December and November 

The rate of house price growth slowed to 1.9 per cent in January from 2.1 per cent in December, according to Halifax’s latest house price index.

January price movements take the average house price in the UK to £281,684, marking a £5,000 jump from December, but values have fallen 3.6 per cent over the previous three months.  

Month-on-month prices remained flat after two months of successive falls of 1.3 per cent in December and 2.4 per cent in November.

The average house in the UK now costs £281,684 according to Halifax

Kim Kinnaird, director, Halifax Mortgages, said: ‘We expected that the squeeze on household incomes from the rising cost of living and higher interest rateswould lead to a slower housing market, particularly compared to the rapid growth of recent years. As we move through 2023, that trend is likely to continue as higher borrowing costs lead to reduced demand.

‘For those looking to get on or up the housing ladder, confidence may improve beyond the near-term. Lower house prices and the potential for interest rates to peak below the level being anticipated last year should lead to an improvement in home buying affordability over time.’

Most UK regions saw a fall in growth. Wales, which has seen strong growth over the past few years saw its rate fall 4 per percentage points from to 2 per cent from 6 per cent last month. 

London, which remains one of the country’s least affordable areas, saw the average house price fall £11,396 over the year.

Month on month prices remained flat but fell over the quarter

Month on month prices remained flat but fell over the quarter 

Jeremy Leaf, north London estate agent and former RICS residential chairman, said: ‘Since the turn of the year, buyers and sellers have been slowly coming to terms with the changed environment. Buyers are negotiating hard, especially the considerable number who are largely equity-driven or not even dependent on mortgage finance so won’t show up in these figures.

‘Looking forward, we are anticipating small ups and downs in prices but no major correction, particularly now more stock is beginning to become available.’

In further good news for borrowers, mortgage rates have continued to fall since the start of the year despite the Bank of England’s base rate reaching 4 per cent, a 14 year high. 

And, while the rate is expected to rise further to a spring peak, analysts say rates will continue to fall after rising sharply 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 agreed a house purchase, should explore their options as soon as possible.

This is Money’s best mortgage rates calculator powered by L&C can show you deals that match your mortgage and property value

What if I need to remortgage? 

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

Anyone with a fixed rate deal ending within the next six to nine months, should look into how much it would cost them to remortgage now – and consider locking into a new deal. 

Most mortgage deals allow fees to be added the loan and they are then only charged when it is taken out. By doing this, borrowers can secure a rate without paying expensive arrangement fees.

What if I am buying a home? 

Those with home purchases agreed should also aim to secure rates as soon as possible, so they know exactly what their monthly payments will be. 

Home buyers should beware overstretching themselves and be prepared for the possibility that house prices may fall from their current high levels, due to  higher mortgage rates limiting people’s borrowing ability.

How to compare mortgage costs 

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

You can use our best mortgage rates calculator to show deals matching your home value, mortgage size, term and fixed rate needs.

Be aware that rates can change quickly, however, and so the advice is that if you need a mortgage to compare rates and then speak to a broker as soon as possible, so they can help you find the right mortgage for you.

> Check the best fixed rate mortgages you could apply for