House prices in the UK have risen for the first time in seven months due to a shortage of properties for sale, new data shows. The cost of an average home rose by around £3,000, or 1.1 per cent, in October to £281,974 ($347,350), the biggest increase since February, said lender <a href="https://www.thenationalnews.com/world/uk-news/2023/07/07/halifax-uk-house-prices-fall-for-third-month-in-a-row/" target="_blank">Halifax</a>. The data confirmed a report last week from Nationwide Building Society, which also said prices rose last month, bucking the trend for much of this year. Halifax said the rise, the first since March, was due to a shortage of homes for sale rather than buyer demand. “Prospective sellers appear to be taking a cautious attitude, leading to a low supply of homes for sale,” said Kim Kinnaird, director at Halifax Mortgages. “This is likely to have strengthened prices in the short-term, rather than prices being driven by buyer demand, which remains weak overall.” Housing indicators have shown some signs of stabilisation in recent months, reducing the risk of the 10 per cent drop in prices predicted by analysts. The market has slowed to a crawl since <a href="https://www.thenationalnews.com/world/uk-news/2023/10/14/people-are-in-a-mess-counting-the-cost-of-rising-uk-interest-rates/" target="_blank">a surge in mortgage rates</a> priced out many potential buyers, but the lack of homes has prevented valuations from crashing. Still-low <a href="https://www.thenationalnews.com/world/uk-news/2023/09/12/uk-unemployment-rises-as-wage-growth-catches-up-with-price-rises/" target="_blank">unemployment </a>and greater mortgage forbearance from lenders have reduced the numbers of owners needing to sell despite high borrowing costs and the cost-of-living crisis. The halt to the Bank of England’s run of <a href="https://www.thenationalnews.com/world/uk-news/2023/11/02/bank-of-england-keeps-interest-rates-at-15-year-high/" target="_blank">interest-rate hikes</a> is also supporting the market. That alleviated the upward march in mortgage rates, suggesting that the biggest pressure on the market may soon lift. However, Ms Kinnaird added that higher interest rates and wider pressures “continue to be challenges for buyers”. Prices were down 3.2 per cent compared to a year earlier, a smaller fall than the 4.5 per cent annual drop seen in September. According to Halifax’s measure, valuations are down 4 per cent since the peak in August 2022. House prices fell across the country on an annual basis, with South-East England suffering the largest drop, of 6 per cent. The most resilient market was Scotland, where values fell just 0.2 per cent. London, where house prices are double the national average, posted a 4.6 per cent decline to £524,057 on average. Halifax said the first-time buyer market held up in October with prices for these properties falling by less than in the wider market. “The rise in the Halifax <a href="https://www.thenationalnews.com/world/uk-news/2023/09/07/uk-house-prices-fall-at-fastest-rate-since-2009/" target="_blank">house price</a> index in October confirmed that house prices are indeed rising, suggesting that the high cost of borrowing alone is not sufficient to trigger the leg down in house prices we predicted,” said Andrew Wishart, senior property economist at Capital Economics. “While it would be unprecedented for a rise in mortgage costs of the scale we have seen not to result in house price falls, supportive labour market conditions and generous lender forbearance mean it is plausible.” Data from mortgage lender Nationwide Building Society showed last week that <a href="https://www.thenationalnews.com/world/uk-news/2023/11/01/uk-house-prices-show-unexpected-monthly-rise-in-october/" target="_blank">house prices climbed unexpectedly </a>by 0.9 per cent in October compared to the previous month. A survey by the Royal Institution of Chartered Surveyors also found new buyer inquiries and sales rebounding from recent lows. However, activity is likely to remain subdued as borrowing costs for those buying or refinancing are much higher than before the Bank of England started hiking interest rates. The average two-year fixed mortgage rate remains at more than 6 per cent, according to Moneyfacts. UK Finance estimates 800,000 fixed-rate deals were due to end in the second half of 2023 and double that number will expire next year.