British House Prices See Unexpected Decline

LONDON (Reuters) – British house prices dropped unexpectedly last month for the first time since March, despite finishing the year higher than in December 2023, according to figures released by Halifax, a mortgage lender.

Halifax, part of Lloyds Banking Group (LON:LLOY), the largest mortgage lender in Britain, reported a 0.2% decrease in house prices for December, following a 1.2% rise in November. Year-on-year, prices were 3.3% higher, though this was less than the 4.2% increase predicted by economists in a Reuters poll.

Economists had anticipated a 0.4% rise in house prices for December alone. In contrast, rival lender Nationwide reported a 0.7% increase in monthly house prices for December, while Bank of England data indicated that mortgage approvals, a critical leading indicator for prices, hit their lowest level since August in November.

Halifax noted that house prices in the second half of 2024 were buoyed by declining mortgage rates, ongoing real wage growth, and some buyers rushing to purchase before an anticipated rise in property purchase taxes in April 2025.

“Providing employment conditions don’t deteriorate markedly from a more recent softening, buyer demand should hold up relatively well. Taking all this into account, we’re continuing to anticipate modest house price growth this year,” stated Amanda Bryden, Halifax’s head of mortgages.