House prices recovered in February, says Halifax

House prices recovered in February month-on-month and are continuing to show year-on-year growth, according to the latest data from the Halifax.

The mortgage lender said prices rose 1.1% in February to an average of £285k, on the back of rising consumer confidence, and were 2.1% ahead of the value seen in the same month last year.

The more positive picture contradicts the picture painted by the Nationwide last week, which found that prices fell in the month, leaving the UK experiencing the first year-on-year declines in prices seen since the first covid lockdown.

Despite the recovery seen in Halifax’s numbers, the lender today said prices were still down on average quarter-on-quarter, by 2.5%, given the sharp falls in prices seen at the end of last year.

It said prices had fallen by an average of around £8,500, or 2.9%, from the peak in prices seen in August last year, and that the market was still on a general “downward trend”.

Kim Kinnaird, director, Halifax Mortgages, said: “Recent reductions in mortgage rates, improving consumer confidence, and a continuing resilience in the labour market are arguably helping to stabilise prices following the falls seen in November and December.

“Still, with the cost of a home down on a quarterly basis, the underlying activity continues to indicate a general downward trend.

“With average house prices remaining high housing affordability will continue to feel challenging for many buyers.”

The news came as listed estate agent Foxtons this morning reported annual results and said it expected revenue from home sales to be “adversely impacted through the majority of 2023” due to the current economic conditions.

Jonathan Hopper, CEO of Garrington Property Finders, said the positive figures from the Halifax were a step in the right direction but the market remained “in a period of transition” with the outcome unclear. He said: “The Halifax’s data shows the average price of a home has now risen on a monthly basis for two months in a row, but it’s far too soon to call the end of the price correction that’s underway nearly everywhere.

“While many buyers have both the financial ability and the opportunity to buy, they lack the confidence to do so – and as a consequence the market is still slowing.”