UK house prices hit nine-month high in December

House prices in the UK rose for the third straight month in December, with the average home costing £3,066 more, according to the Halifax House Price Index published on Friday.

The average house price stood at £287,105 last month, up 1.1% from November and its highest level since March 2023. Compared with the year before, prices are now £4.800 higher, equating to annual growth of 1.7%.

However, Halifax Mortgages director Kim Kinnaird pointed out that the fourth-quarter price growth was simply a rebound, with prices rising just 1.7% over the whole of 2023.

"Whilst it’s encouraging that we saw growth in the last three months of the year, this was preceded with property price falls for six consecutive months between April and September. The growth we have seen is likely being driven by a shortage of properties on the market, rather than the strength of buyer demand," Kinnaird said.

Nevertheless, there may be an increase in confidence from buyers in the coming moths as mortgage rates continue to ease, as falling inflation levels increase the likelihood of interest-rate cuts from the Bank of England. That said, house prices are predicted to fall by between 2% and 4% in 2024, Halifax said.

“As we move through 2024, the UK property market will continue to reflect the wider economic uncertainty and buyers and sellers are likely to be naturally cautious when considering making a move," said Kinnaird.

"While wage growth is now above inflation, helping to ease cost of living pressures for some and improving housing affordability, interest rates are likely to remain elevated for as long as inflation remains markedly above the Bank of England’s target."