UK Halifax House Price Growth Accelerates

(RTTNews) - UK house prices growth accelerated unexpectedly in November as easing mortgage rates boosted buyer confidence, mortgage lender Halifax said Friday.

House prices grew at a pace of 1.3 percent month-on-month, while the rate was forecast to slow to 0.3 percent from 0.4 percent in October. Moreover, prices increased for the fifth month in a row and marked the strongest growth so far this year.

Property prices climbed 4.8 percent on an annual basis compared to an increase of 4.0 percent in October. Typical property costs GBP 298,083, a new record.

Although demand for mortgages continued to improve, many potential buyers and movers still face significant affordability challenges and buyer confidence may be tested against a changeable economic backdrop, Halifax head of mortgages Amanda Bryden said. "As we move towards the end of the year and into 2025, positive employment figures and anticipated decreases in interest rates are expected to continue supporting demand," said Bryden.

"This should underpin further house price growth, albeit at a modest pace as borrowing costs remain above the average of a few years ago," Bryden added.

Capital Economics' economist Paul Dales said the leap in house prices in November mirrors the jump in the Nationwide measure and suggests that some relief rally or release of pent-up demand after the Budget has more than offset the latest rise in mortgage rates.

However, the economist noted that it seems very unlikely that prices will continue to rise at this rate for long.

In November, the Bank of England had reduced its benchmark rate by 25 basis points to 4.75 percent. The bank is widely expected to maintain status quo at the December meeting.

In a Financial Times video interview on Wednesday, BoE Governor Andrew Bailey signaled that interest rates could be reduced four times over the next year provided inflation continues to ease.