According to the Halifax, house prices saw a rise in October for the first time in six months, though the lender anticipates a decline in property values over the coming year.

The UK's largest mortgage lender reported a 1.1% increase in prices last month, bringing the average property value to £281,974.

The Halifax attributes this rise to a limited supply of homes for sale, as buyer demand continues to remain subdued.

It projects a decline in prices until 2025, with buyers grappling with higher interest rates and the mounting cost of living.

Halifax's data reveals that house prices in October were 3.2% lower than the same period in the previous year.

Kim Kinnaird, Director of Halifax Mortgages, stated, "Prospective sellers appear to be taking a cautious attitude, leading to a low supply of homes for sale. This is likely to have strengthened prices in the short term, rather than prices being driven by buyer demand, which remains weak overall."

The Bank of England had been steadily increasing interest rates in an effort to curb rising inflation. While rates have recently remained unchanged at 5.25% in the past two meetings, there is no expectation of a rate cut in the near future.

Given this outlook, the Halifax expects "house prices to fall further overall, with a return to growth from 2025."

Nevertheless, the report points out that the recent price declines follow an extended period of increases, with average house prices still around £40,000 higher than pre-pandemic levels.

The Halifax also noted that house prices in all UK nations and regions decreased compared to the previous year. The most significant drop was in the south-east of England, with prices falling by 6%, while Scotland experienced the smallest decline, with just a 0.2% drop over the year.

The report also highlighted that despite overall housing demand being weak, the first-time buyer market has held up relatively well. Buying a first home remains an attractive option, especially with rising rental prices.

The increase in October aligns with the findings of the Nationwide, which reported a 0.9% rise in values last month. However, the Nationwide noted that prices were still lower than the previous year, and the housing market activity remains "extremely weak," with buyers struggling due to higher mortgage rates.

Both the Halifax and Nationwide base their survey data on their own mortgage lending, excluding those who make cash purchases or engage in buy-to-let deals.

According to the latest official data, cash buyers currently account for more than a third of housing sales.

Sarah Coles, Head of Personal Finance at Hargreaves Lansdown, noted that buyers are still scarce, with little indication of an immediate change. She pointed out that the "miserable" number of approved mortgages in September, according to Bank of England figures, suggests that the market will remain subdued.

However, Sam Mitchell, the head of online estate agent Purplebricks, suggested on the BBC's Today programme that mortgage lenders were starting to compete for customers. "Yesterday we saw both Halifax and Virgin drop their rates, which I think is super encouraging going into what's typically a quieter time of year, [and] bodes very, very well for 2024," he said.

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