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UK house prices rise again after months of falls

People walk past a row of colourful houses in London, Britain, March 19, 2023. REUTERS/Henry Nicholls/File Photo
People walk past a row of colourful houses in London

British house prices rose for a second month in a row in November, figures from major mortgage lender Halifax showed on Thursday, adding to signs that the past year’s fall in house prices is bottoming out.

Halifax, part of Lloyds Banking Group, said house prices rose 0.5 per cent in November on a seasonally adjusted basis after a 1.2 per cent increase in October which followed an unbroken six months of declines.

The average house price of 283,615 pounds ($356,447) was 1.0 per cent lower than a year earlier but up 1.7 per cent from their trough in September.

Rival mortgage lender Nationwide reported last week that house prices on its measure rose for a third month in a row in November, and were 2 per cent lower than a year earlier.

“The resilience seen in house prices during 2023 continues to be underpinned by a shortage of properties available, rather than any significant strengthening of buyer demand. That said, recent figures for mortgage approvals suggest a slight uptick in activity,” Halifax director Kim Kinnaird said.

Consultancy Capital Economics forecast a further 1.5 per cent fall in house prices for 2024, but said the decline may be smaller.

“While a shallow recession and a rise in unemployment next year may cause a further modest fall in house prices, with the peak in mortgage rates behind us, prices may well have already bottomed out,” Capital economist Imogen Pattison said.

British house prices, like those in many other rich countries, surged during and after the COVID-19 pandemic due to demand for more living space, temporary tax incentives and record-low interest rates.

Between February 2020 and a peak in September 2022, British house prices rose 27 per cent according to official statistics.

Over the past year, house prices have fallen due to a sharp rise in mortgage costs as the BoE raised interest rates from 0.1 per cent in December 2021 to a 15-year high of 5.25 per cent by August 2022 in response to the highest inflation in more than 40 years.

($1 = 0.7957 pounds)

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