House prices jump in January - Halifax
By Abigail Townsend
Date: Friday 07 Feb 2025
(Sharecast News) - House prices jumped in January to reach fresh highs, industry data showed on Friday, reversing December's fall.
According to the latest house price index from Halifax, prices rose by a surprise 0.7% in January, following a 0.2% dip a month earlier. Analysts had been expecting a far smaller improvement of 0.2%.
The average property price now stands at £299,138 - a new record high.
However, growth slowed marginally year-on-year, to 3% from 3.4% in December. It was the slowest annual rate since July.
Amanda Bryden, head of mortgages at Halifax, said: "Affordability is still a challenge for many would-be buyers, but the market's resilience is noteworthy.
"There's strong demand for new mortgages and growth in lending. With a stamp duty increase looming, some of this demand may have come from first-time buyers eager to complete transactions before the end of March.
"Despite geopolitical uncertainties and waning consumer confidence, other key indicators look fairly positive for the housing market."
On Thursday, the Bank of England cut interest rates by 25 basis points to 4.5% as it looked to manage inflation - which is expected to tick higher this year, on the back of increased energy costs - and stalled economic growth.
It also halved its GDP growth forecasts for the year to just 0.75%.
Analysts expect the BoE to cut the cost of borrowing another two or three times during 2025.
Jonathan Handford, managing director at estate agent Fine & Country, said house prices were benefiting from "renewed buyer confidence and shifting economic conditions".
He continued: "The first interest rate cut of 2025 has sent a clear signal to the market, which should prompt lenders to lower mortgage costs and entice hesitant buyers back into the fray.
"As borrowing becomes more affordable, competition is expected to intensify, driving demand and putting further upwards pressure on prices.
"Market dynamics are also being shaped by the looming stamp duty threshold reduction."
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