House prices stabilise.

The decline in house prices slowed to a crawl at the start of the year, but a significant correction in the

average home price is still expected as borrowing costs mount.

The typical UK property now costs £281,684, down by £29 from £281,713 last month, according to figures published by Halifax, Britain's biggest mortgage lender. It follows more significant falls of 1.3 per cent in December and 2.4 per cent in November.

Households are facing record falls in living standards owing to the cost of living crisis, repeated interest rate rises and a slowdown in the global economy.

The average home price is now about £12,500, or 4.2 per cent, cheaper than it was at its peak in August last year, but it remains about £5,000 higher than the average January 2022.

Mortgage rates have jumped over the past year in line with the base rate of interest, which has risen from a historic low of 0.1 per cent in December 2021 to its present level of 4 per cent.

Lower house prices and the potential for interest rates to peak below the level anticipated last year should improve home buying affordability over time."

Tom Bill, head of UK residential research at Knight Frank, the property consultancy, said the start of 2023 provides a better guide for house prices than the declines recorded at the end of last year.

"The poor performance of the UK housing market in the chaotic final months of last year is not a useful barometer for 2023," he said.

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