Halifax Price Index: London average house prices see first annual growth in over a year

London house prices have seen their first positive annual growth since January last year, according to the latest date from the Halifax House Price Index.

In February the capital saw a 1.5% rise, with an average property priced at £536,996.

Across the UK, house prices increased by 0.4% - a fifth consecutive monthly rise.

Kim Kinnaird, director at Halifax Mortgages, said: “UK house prices rose for the fifth consecutive month in February, up by +0.4% or £1,091 in cash terms, with the average house price now £291,699.

“On an annual basis, house prices were +1.7% higher than a year ago, slowing from +2.3% in January. However, these figures continue to suggest a relatively stable start to 2024 and align with other promising signs of increased housing activity, such as mortgage approvals."

She said the average price of a UK home is now only about £1,800 off the peak seen in June 2022.

"While it is encouraging that we’ve seen growth in recent months, what happens next remains uncertain," she said. "Although lower mortgage rates, alongside expectations of Bank of England interest rate cuts this year, should help buyer confidence in the short term, the downward trend on rates is showing signs of fading.

“Even with growing wages and inflation falling back, raising a deposit and affording a sizeable mortgage remains challenging, especially for those looking to join the property ladder, so it remains a possibility that there could be a slowdown in the housing market this year.”

Nathan Emerson, CEO at Propertymark, the professional body for estate agents, said: “The start of 2024 continues to look positive for many homeowners who are hoping to sell their home or jump on the property ladder.

"Our member agents reported that there has been an 89 per cent increase in new properties coming onto the market and a 129% in the number of market appraisals undertaken.

"The Bank of England recently stated that the central bank does not have to meet its target of cutting inflation down to two per cent before they start cutting interest rates. In order to persuade more people this is the year to sell their home, the Bank of England should start considering reducing interest rates to ease borrowing costs for aspiring homeowners who deserve some economic confidence after experiencing turbulence since 2020.”

In Wednesday's Budget, chancellor Jeremy Hunt announced a reduction in capital gains tax on charged on house sales from 28% to 24%, while at the same time abolishing a tax relief on stamp duty used by landlords when making bulk purchases.