Prices fell by 0.8% on a monthly basis but still rose by 1.5% on a quarterly basis – with average prices standing at £212,321.
House prices rose by 9.2% in the year to April 2016 despite slowing from 10.1% in March, Halifax’s House Price Index has found.
Prices fell by 0.8% on a monthly basis but still rose by 1.5% on a quarterly basis – with average prices standing at £212,321.
This was the lowest quarterly and annual rise since last autumn.
Martin Ellis, Halifax housing economist, said: “Current market conditions remain very tight as the severe imbalance between supply and demand persists.
“This situation, combined with low interest rates and rising employment and real earnings, should continue to push house prices up over the coming months.
”Weakening sentiment regarding house price prospects and a dip in consumer confidence, however, suggest that annual house price growth may ease.”
Jeremy Duncombe, director, Legal & General Mortgage Club, said:“It’s not surprising to see that house prices have softened slightly following the rush to complete before changes to stamp duty took hold for buy-to-let purchasers.
"However, it’s important to note that prices are still rising annually at an alarming rate. The release of our ‘Bank of Mum and Dad’ report last week brought this issue into sharp focus, as it revealed how hard it is for first time buyers to get onto the property ladder without a helping hand from their family and friends.
“The Bank of Mum and Dad will lend £5billion to loved ones in 2016, making it the equivalent of a top ten 10 mortgage lender in the UK. This may be good news for families with the financial resources to pursue this model, but what about the rest? Now more than ever, we need to make sure that we are building enough houses to re-balance supply and demand in the UK property market, so that no one is forced to abandon their dream of homeownership.”
Andrew McPhillips, Yorkshire Building Society chief economist, said:“Now that the landlord rush has subsided, market activity is likely to be relatively choppy throughout the remainder of 2016. Uncertainty around the upcoming EU referendum is likely to reduce overseas investment, which may cause house price growth to fluctuate to some extent throughout the year.
“Although the EU vote is likely to cause a drop in demand for some properties, it is likely that there will still be more prospective buyers than there are houses. This means that house prices may continue to increase beyond inflation and wage-growth at least in the short-term, regardless of market uncertainty.”
Mark Posniak, Managing Director at Dragonfly Property Finance, said: "After the artificial stimulus provided by the stamp duty deadline for buy-to-let and second homes, house prices were almost certain to come off the boil in April.
"As we approach the EU referendum, caution will almost certainly prevail and prices are likely to edge down further.
"People are starting to understand the magnitude of the Brexit vote and that will lead many to batten down the hatches.
"We are unlikely to see a material decline in the market, however, due to the fact that the supply/demand imbalance remains as pronounced as ever and the cost of borrowing so low.
“At present, given the EU referendum and broader economic uncertainty, both domestic and global, there are a number of reasons not to buy, but at the same time there are strong structural reasons to buy. This symbolises the current volatility in UK property.
"How the property market reacts to the result of the EU Referendum vote is frankly anyone's guess. In the next month or two, the UK property market is entering the unknown."
Alex Gosling, CEO of online estate agents HouseSimple.com, added:"The stampede of second home buyers in March, rushing to beat the 1 April stamp duty deadline, gave us a slightly distorted picture of market conditions, with average prices up on a spike in sales.
"Although average prices have not surprisingly dropped off in April, there's nothing to suggest buyers have run for the hills. It's more a case of the market settling down.
"However, with fewer buy-to-let investors looking to buy in April, the slack was expected to be picked up home buyers, and that doesn't appear to have happened - largely due to the impending Brexit vote, a huge black cloud looming on the horizon.
"Uncertainty over Brexit is seriously denting consumer confidence, and buyer activity could well stall in May and early June as the country is gripped by fear as to which way the vote will go."
And Rob Weaver, Director of Investments at property crowdfunding platform Property Partner, said:“The much-heralded stamp duty deadline ultimately led to a stampede by buy-to-let investors and second home owners upto March. Unsurprisingly, April’s dip in house prices is the calm after the storm.
“A seemingly quieter market belies the ever-increasing squeeze in supply. And with record low interest rates, and buoyant employment, it’s likely that we’ll see a return to price rises in the longer-term.
“But confidence appears to be flagging, potentially indicating that there may be a softening in annual growth.
“Predictions can be tricky particularly with another deadline looming – June 23 and the EU referendum. Butterflies in the stomach over a potential Brexit may cause housing activity to go aflutter.
“Uncertainty is the operative word and we may see a dampening in prices in the short-term."
