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Last month saw highest UK house prices in a year Posted On 12 February 2024

Halifax, the UK’s biggest mortgage lender, have said that house price rises in January were the highest for a year as mortgage rates continued to ease

 

Property prices have risen due in part to a decrease in inflation and a strong labour market. As a result, the average cost of a home has increased to £291,029, up 2.5 percent from January 2023.

 

The data was released alongside the news that leading homebuilder Barratt would acquire competitor Redrow for a sum of £2.5 billion. Due to rising building costs and decreased demand caused by increasing borrowing rates, housebuilders have had difficulty in recent years. However, "greater confidence" in the housing market has resulted from anticipation that rates will be lowered this year and that inflation, or the rate at which prices are rising, will slow down.

 

The cost of borrowing has increased recently for first-time homebuyers and homeowners wishing to refinance their properties. Since August 2023, the Bank of England has maintained interest rates at a 16-year high of 5.25 percent in an effort to moderate the rate of increase in general prices. But according to Bestinvest's Alice Haine, a personal finance specialist, the Bank may lower interest rates as early as the summer because inflation is predicted to decline in the upcoming months.

 

Last month’s rise in house prices will benefit the economy in multiple ways, largely because the housing market is closely linked to consumer spending. A rise in home values benefits homeowners and gives them a greater sense of security. Some will take out larger loans against the value of their homes in order to pay off other debt, remodel their homes, augment their pensions, or purchase goods and services.

 

 

#property #buying #selling

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