“Optimism has survived another difficult month” says business consultancy Hargreaves Lansdown in response to the latest house price index. 

Indeed, the industry has responded favourably to the Halifax data which shows that in February annual price rises stuck at 2.1 [er cent for the third consecutive month, meaning average prices are down around £8,500 from the peak in August 2022 but are still £9,000 above the average in early 2022.

The price of flats fell 0.3 per cent in the past year, terraces are up just 0.3 per cent, and detached homes up 1.5 per cent. The typical price of new builds is up 6.6 per cent while existing properties are up 1.1% – the lowest in almost a decade.

“What we are seeing at the sharp end is confirmed in these well-respected figures” explains Jeremy Leaf, north London estate and a former RICS residential chairman.

He continues: “The reduction in housing market activity has been quite modest considering recent rises in mortgage rates and the cost-of-living shock, while a fresh crop of properties has buoyed viewings considerably and is outstripping sales agreed. As a result buyers are waiting to see if prices may soften further and mortgage repayments stabilise before committing.”

Tom Bill, head of UK residential research at Knight Frank, comments: “The UK housing market appears near the end of a long hangover from the mini-Budget rather than on the verge of a price plunge. 

Activity stopped well before Christmas due to the mortgage market turmoil but has picked up this year as people come to terms with where rates are settling. That said, asking prices are likely to come under more pressure as we enter the traditionally busier spring market due to tighter affordability. We expect around half of the 20 per cent increase seen during the pandemic to unwind but most evidence that is not backwards-looking points to a stronger market than expected.”

The director of Benham and Reeves, Marc von Grundherr, sees it this way: “Although previous reports of housing market health have been less than positive, those of us on the ground are privy to changes in market sentiment far sooner than the reporting of topline statistics allows.

“While current house price performance may remain sluggish when compared to the meteoric rates of the pandemic market boom, there’s been a notable uptick in activity in 2023 and this has reversed the rot seen during the back end of last year. Yes, we expect the market to move forward at a more measured pace over the year ahead, but what we simply aren’t seeing is an exodus of buyers forcing sellers to dramatically reduce prices, bringing the market to its knees in the process.”

Hargreaves Lansdown’s analyst Sarah Coles takes a more nuanced view, saying: “When you drill further into the figures, it’s clear certain parts of the market are pushing the average up, and some are looking pretty miserable. 

“Looking at flats alone, prices are down over the year. Meanwhile, when you remove new builds from the equation, overall prices are up around one per cent – the smallest rise in almost a decade. Falling or stagnant prices could persuade buyers that a wait-and-see strategy is still worth pursuing.

“The resilience of prices in some corners of the market so far could actually work against sellers, especially now that mortgage rates are higher. A combination of the two – plus higher overall prices feeding into affordability calculations – means that even if buyers are still keen to move, their mortgage company may have other ideas.”