House prices fall for second month in a row as higher mortgage costs pile pressure on buyers
House prices have fallen for two months in a row as higher mortgage costs pile pressure on the market.
Land Registry figures showed prices fell 0.6 per cent in January following a 0.4 per cent decline in December.
But they remained 6.3 per cent, or £17,000, higher than in January last year at £190,000.
Mortgage pressure: Land Registry figures showed house prices fell 0.6% in January following a 0.4% decline in December
It came as one of Britain’s biggest builders said confidence is returning after a sharp slowdown. Vistry, formerly known as Bovis Homes, said sales are improving and building costs have started to fall.
Boss Greg Fitzgerald said: ‘We are back to a normalised kind of housing market, pre-pandemic, one which we can very much operate in.’
The FTSE 250 firm hailed ‘an improving trend on private sales’ in the first 11 weeks of the year after a slowdown when mortgage rates spiked following Kwasi Kwarteng’s mini-Budget last year.
‘We have seen increased consumer confidence, particularly as mortgage rates have trended downwards and availability has improved,’ it said.
Vistry’s sales rate, the average number of sales per site each week, is at 0.54 so far this year. But it has risen to 0.62 in the past four weeks.
If the trend continues, the housebuilder said profits will hit £440million this year, in a 5pc increase from 2022.
Vistry built 11,951 homes last year, up 7.9 per cent from a year earlier. Overall sales hit £3.1billion, a 14.1 per cent increase, while profit jumped by a fifth to £418.4million.
In contrast, FTSE 100 housebuilder Persimmon warned it would build as few as 8,000 homes this year if higher mortgage rates and the cost of living crunch continued, a 46 per cent drop from last year.
Rival Barratt Developments said it would build fewer homes this year amid a ‘marked slowdown’ in the housing market.
Adam Vettese, analyst at investing platform EToro, said: ‘While other housebuilders have given the impression that they are battening down the hatches in recent updates, Vistry is relatively bullish.
‘House prices are softening and transactions have slumped significantly, which has led to a significant drop-off in private forward sales for Vistry.
‘However, that drop-off has been more than offset by an uptick in affordable and mixed-tenure forward home sales.’ Vistry shares rose 0.1 per cent, or 1p, to 733p.