According to one index, the average house price in the UK rose by £3,785 in January, marking the fourth consecutive month of growth.
Property values generally rose 1.3 per cent compared to December, Halifax said.
House prices rose 2.5% annually, the highest annual increase since January 2023.
Halifax Mortgages director Kim Kinnaird said: “House prices have risen for four consecutive months, resulting in annual growth reaching 2.5%, the highest since January last year.
“Recent increases in competition, lower mortgage rates from lenders, easing inflationary pressures and a still-resilient labor market have all contributed to increasing confidence among buyers and sellers. This gives the housing market a positive start to 2024.
“However, while housing activity has increased in recent months, interest rates remain high compared to the lowest recorded in recent years and demand continues to outstrip supply.
“For people looking to buy their first home, the average deposit is £53,414, which is around 19% of the purchase price. It's no surprise that almost two-thirds of new buyers stepping onto the ladder are now purchasing in a joint name.
“Going forward, affordability issues are likely to remain and a further modest decline should not be ruled out against the backdrop of widespread uncertainty in the economic environment.”
Alice Haine, Bestinvest personal finance analyst at asset manager Evelyn Partners, said: Reductions are expected from the summer.
“As the outlook improves, mortgage rates and affordability levels improve for first-time buyers and those looking to refinance.”
Tom Bill, head of UK housing research at estate agent Knight Frank, said: “After being hit by 14 successive rate rises last year, house prices are expected to remain strong with multiple interest rate cuts expected in 2024. “There is,” he said.
“The number of new buyer registrations and submitted offers has increased since lenders cut prices last month, suggesting stronger demand and activity levels are likely to lead to modest single-digit price increases this year.”
Sarah Coles, head of personal finance at Hargreaves Lansdown, said: “We’re still far from a seller’s market, but after months of trying in vain to convince buyers to look at our homes, this is a really positive development. . However, sellers should not be too obsessed with pricing as this rebound may not last.”
“The general view is that 2024 will be a much richer year for the UK property market and we are already seeing early signs of this,” said Marc von Grundherr, director at estate agents Benham and Reeves.
Verona Frankish, CEO of Joppa, said: “Going forward, not only is it highly likely that the real estate market has bottomed in relation to last year’s decline in house prices, but interest rates are also likely to have now peaked.”
Nathan Emerson, chief executive of property expert body Propertymark, said: “We now hope the Bank of England will begin to gradually cut interest rates to further stimulate growth in the housing market.”
Nicky Stevenson, managing director of estate agent group Fine & Country, said: “A strong start to 2024 should provide more confidence to sellers and encourage more listings.”
Iain McKenzie, chief executive of the Guild of Property Professionals, said: “If you’re considering marketing your property this year, your local estate agent will be the most knowledgeable about prices in your area. We’ve seen very different trends across the UK over the past year, so a local perspective is important to secure the best possible price.”
Matt Thompson, head of sales at London-based estate agents Chestertons, said: “The gradual introduction of more attractive mortgage products boosted buyer confidence in January, allowing more buyers to enter the market. “This increase in activity has been further fueled by pent-up demand from homebuyers who were unable to find a property last year.”
– According to Halifax, average house prices and annual changes are as follows:
East Midlands, £236,862, 0.5%
East of England, £327,270, minus 2.0%
London, £529,528, minus 0.4%
North East, £169,505, 2.0%
North West, £229,707, 3.2%
Northern Ireland, £195,760, 5.3%
Scotland, £206,087, 4.0%
South East, £379,220, minus 2.3%.
South West, £295,399, minus 1.4%
Wales, £219,609, 4.0%
West Midlands, £251,185, 0.7%
Yorkshire and the Humber, £207,602, 2.8%