UK house prices rose 2.5% in the year to January, according to the latest Halifax house price index, as lower mortgage rates and easing inflationary pressures boosted confidence among buyers and sellers.

The UK's biggest mortgage lender said the average home now costs £291,000, an increase of nearly £3,900 from December. The 1.3% uplift marked the fourth consecutive monthly rise.

“The recent reduction of mortgage rates from lenders as competition picks up, alongside fading inflationary pressures and a still-resilient labour market has contributed to increased confidence among buyers and sellers," said Kim Kinnaird, director at Halifax Mortgages.

“This has resulted in a positive start to 2024’s housing market.”

The figures come after similar news last week from Nationwide, which said the outlook for the UK housing market was “more positive” following a 0.7% jump in prices in January.

Meanwhile, the Royal Institution of Chartered Surveyors reported last month that new buyer inquiries fell by just 3% in December, a strong improvement on November's 13% decline.

However, the Halifax also warned that interest rates remain elevated compared with historic lows seen in recent years, and demand continues to exceed supply.

UK homes builder Barratt to buy Redrow for £2.5 billion

The Herald: David Thomas, BarrattDavid Thomas, Barratt (Image: Barratt)

Barratt Developments is poised to take over Redrow in a deal that values its fellow housebuilder at more than £2.5 billion.

Shares in Redrow surged more than 12% after it emerged directors will recommend shareholders accept the all-share approach from its rival. Barratt shares fell more than 6%.

The deal comes amid a challenging period for UK housebuilders, which have seen sales come under pressure from rising interest rates, though recent figures have suggested the market was beginning to show signs of recovery.

Virgin Money warns further jobs will go under cuts plan

The Herald:

Virgin Money, the institution which owns the former Clydesdale Bank, has declared it is on track to make annual savings of around £200 million, following its latest round of branch closures.

And it warned further job cuts will come as part of its restructuring activity this year.

The bank slashed its branch network by around 30%, reducing the total to 91, and cut its office footprint by around 35% in a restructuring programme announced in July that was completed in its first quarter. It noted that there would be “further opportunities for property rationalisation”, citing the example of its Glasgow head office consolidation.