One of Britain’s biggest mortgage lenders said house prices are stabilizing after a decline last year, indicating buyers have adapted to a surge in interest rates.
(Bloomberg) — One of Britain’s biggest mortgage lenders said house prices are stabilizing after a decline last year, indicating buyers have adapted to a surge in interest rates.
Halifax said the average cost of a home rose 0.8% in March, the third monthly gain in a row. That marks a reversal after four consecutive declines at the end of 2022.
The figures clash with Nationwide Building Society’s reading of the market, which suggests prices are dropping at the fastest rate since the global financial crisis more than a decade ago. The two lenders base their figures on the mortgages they write, leading to some divergence.
“These latest figures continue to suggest relative stability in the housing market,” Kim Kinnaird, director of Halifax mortgages, said in a statement Thursday. She added that while interest rates have soared, mortgage rates have come off recent highs set last year.
Halifax said a “spike” in borrowing costs in November and December now has been reversed, with the typical five-year mortgage deal down a full percentage point. That’s despite the quickest series of rate rises from the Bank of England, driving the benchmark lending rate to 4.25% last month, the highest since 2008.
“Falling mortgage rates and expectations that the worst for the economy may be behind us have tempted buyers and sellers out of hibernation,” said Jeremy Leaf, a north London estate agent and a former residential chairman of the Royal Institution of Chartered Surveyors.
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