UK house prices became slightly more affordable in 2024, Halifax says
By David Milliken
LONDON, Nov 28 (Reuters) -Buying a new home in Britain became a little more affordablethis year as average wages rose faster than house prices and mortgage costs, the country's largest mortgage lender said on Thursday.
Halifax, part of Lloyds Banking Group LLOY.L, said the average house in the third quarter of 2024 cost 6.55 times the mean annual full-time income, down from 6.62 in 2023 and a record high of 7.24 in mid-2022.
The cost of servicing a new mortgage dropped to its lowest in just over two years at 29% of average income, down from 33% a year ago, based on a mortgage with a 30-year term, a five-year fixed interest rate and a 25% deposit.
"While homes are becoming more affordable, the progress has been gradual," Halifax's head of mortgages, Amanda Bryden, said.
"Buying a property remains a significant challenge for many, with prices still near record highs and interest rates likely to stay higher than we've been used to over the past decade," Bryden said.
The Bank of England raised interest rates to a 15-year high of 5.25% in August 2023 and started to cut them in August this year followed bya further reduction to 4.75% this month.
Economists polled by Reuters last week expected the BoE to cut rates to 3.75% by the end of next year, while they predicted house prices would rise by 3.1% next year and 4% in 2026.
Halifax said the average house price in the third quarter of 2024 was 292,508 pounds ($368,823), barely changed on two years ago, although prices vary widely across the United Kingdom even after taking regional wage differences into account.
Housing was least affordable in southeast England and in London - where new mortgages cost 39% and 36% of local salaries - and cheapest in northeast England at 19% and Scotland and Northern Ireland at 22% of local full-time earnings.
($1 = 0.7931 pounds)
Reporting by David Milliken
Editing by William Schomberg
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