UK Halifax House Prices Fall For First Time In 9 Months

(RTTNews) - UK house prices dropped for the first time in nine months as the market lost some momentum towards the end of the year but house prices are expected to rise moderately this year, mortgage lender Halifax said Tuesday.

House prices registered an unexpected monthly drop of 0.2 percent in December, in contrast to the 1.2 percent increase in November. This was the first decrease since March. Prices were expected to grow 0.8 percent.

On a yearly basis, property prices advanced 3.3 percent, which was slower than the 4.7 percent increase seen in the preceding period. House prices averaged GBP 297,166 in December.

Halifax Head of Mortgages Amanda Bryden said mortgage affordability will remain a challenge for many, especially as the bank rate is set to come down more slowly than previously projected.

Bryden observed that the housing market has been supported in recent months by falling mortgage rates, income growth and the announcement on upcoming Stamp Duty policy changes.

"However, providing employment conditions don't deteriorate markedly from a more recent softening, buyer demand should hold up relatively well and, taking all this into account, we're continuing to anticipate modest house price growth this year," added Bryden.

Last week, the Nationwide Building Society said house price inflation is likely to return to the 2-4 percent range in 2025 once stamp duty related volatility subsides.

Capital Economics' economist Ashley Webb said the mortgage rates will fall further than most expect to 4.0 percent in 2026 and house prices will climb by a healthy 3.5 percent in the fourth quarter of this year and 4.5 percent in the fourth quarter of 2026.

In 2024, the Bank of England had reduced its benchmark rate by 50 basis points. The first reduction was in August, followed by another reduction in November.