House prices rose again last month and there are signs that activity in the market is picking up, according to the UK’s biggest mortgage lender.
Halifax said prices rose by 0.5% in November, the second increase in a row.
It said recent figures for mortgage approvals suggested “a slight uptick” in activity among buyers as the cost of home loans eases.
However, prices are still lower than a year ago, and Halifax said the market would remain under pressure in 2024.
Property prices are 1% lower than in November last year, the lender said, with the average property costing £283,615.
Halifax’s findings echo that of rival lender Nationwide, who said last week that prices had risen in November but remained lower than a year earlier.
Kim Kinnaird, director at Halifax Mortgages, said prices had “held up better than expected” over the past year.
However, she added that house prices continued to be “underpinned by a shortage of properties available, rather than any significant strengthening of buyer demand”.
Despite this, increasing numbers of mortgage approvals suggest that the recent falls in mortgage interest rates “may be leading to increased buyer confidence, seeing people more inclined to push ahead with their home purchases”.
The Bank of England has raised interest rates steadily over the past two years in an attempt to slow down inflation, which is the rate at which consumer prices rise.
The Bank’s main rate now stands at a 15-year high of 5.25%, and this has pushed up mortgage rates, making it more expensive for people to buy homes.
However, expectations that interest rates have peaked has led to a fall in mortgage rates in recent weeks, although the Bank of England has repeatedly warned against suggestions that it will be cutting rates anytime soon.
Figures released by the Bank last week revealed the number of mortgages approved for homebuyers picked up in October to 47,400, from an eight-month low of 43,300 in September.
Ms Kinnaird warned that uncertainty over the outlook for the economy meant it was difficult to know how long any pick-up in the housing market would last.
“Other pressures – like inflation, the broader cost of living, overall employment rates and affordability – mean we expect to see downward pressure on house prices into next year,” she said.
While Halifax is the UK’s biggest mortgage lender, its figures only take into account buyers with mortgages and do not include those who purchase homes with cash or buy-to-let deals.
According to the latest available official data, cash buyers currently account for over a third of housing sales.
