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According to the latest data from Halifax, the average house price in the UK has surpassed the £300,000 mark for the first time. In January, the country’s largest mortgage lender reported that the typical property value reached £300,077. This development is seen as a significant milestone, although it poses challenges for first-time buyers attempting to enter the market.
Halifax also highlighted that wage growth has outpaced the rise in house prices since 2022, potentially aiding affordability. Meanwhile, lenders have begun competing more aggressively for first-time buyers by offering mortgage products that require lower deposits. Karen Noye, a mortgage specialist at wealth management firm Quilter, acknowledged the milestone’s implications, stating, “it’s yet another nail in the coffin for first‑time buyers already battling stretched affordability.” She also noted that despite recent declines, mortgage rates remain well above the historically low levels experienced over the past decade, a factor that continues to dampen consumer confidence.
The bank observed a 0.7% increase in house prices last month, reversing December’s 0.5% dip, with values now up 1% compared to the same period the previous year. It’s important to remember that house price surveys vary due to differences in methodology and the mortgage lending bases they use. Halifax’s average price figures typically come in higher than those reported by other surveys. For instance, Nationwide, another major lender, reported a 0.3% rise in January, setting the average property price at £270,873.
Amanda Bryden, head of mortgages at Halifax, described the housing market’s start to the year as “steady,” although she acknowledged that the new price threshold creates affordability challenges for many buyers. She pointed out that since late 2022, earnings have grown faster than property prices, leading to an improvement in fundamental affordability. Bryden views this as a constructive sign for both potential buyers and the market’s long-term health. She added that more mortgage deals can now be found at rates below 4%, and if inflation continues to decline, these rates may see further gradual reductions throughout the year. Halifax forecasts house prices could rise by between 1% and 3% in 2024. If interest rates are cut by the Bank of England later this year, Noye expects that this will provide gradual support rather than causing a sharp increase in property values, with stability returning to the market but enthusiasm remaining subdued
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