Halifax data shows a more stable housing market
The average house price in the UK decreased by 0.3% from £287,891 in March to £286,896 in April, data from mortgage lender Halifax showed.
The annual rate of house price growth also slowed to 0.1% last month compared with the 1.6% recorded in the previous month, meaning average property prices are largely unchanged from this time last year.
The month-on-month decrease in house prices followed three consecutive months of growth, with the typical property now having a price tag of £286,896, which is around £7,000 below last summer’s peak, though still some £28,000 higher than two years ago.
“House price movements over recent months have largely mirrored the short-term volatility seen in borrowing costs,” Kim Kinnaird, director at Halifax Mortgages, commented on the latest Halifax House Price Index. “The sharp fall in prices we saw at the end of last year after September’s mini budget preceded something of a rebound in the first quarter of this year as economic conditions improved.
“The economy has proven to be resilient, with a robust labour market and consumer price inflation predicted to decelerate sharply in the coming months. Mortgage rates are now stabilising, and though they remain well above the average of recent years, this gives important certainty to would-be buyers. While the housing market, as a whole, remains subdued, the number of properties for sale is also slowly increasing, as sellers adapt to market conditions.
Kinnaird added that while the new figures may indicate a more steady environment, cost-of-living concerns remain real for many households, which will likely continue to weigh on sentiment and activity.
“Combined with the impact of higher interest rates gradually feeding through to those remortgaging their current fixed-rate deals, we should expect some further downward pressure on house prices over the course of this year,” she said.
“The market hasn’t yet turned a corner, but at least the fog of uncertainty is lifting,” Jonathan Hopper, chief executive at Garrington Property Finders, also commented.
“The recovering mortgage market – which saw mortgage approvals jump to a five-month high in March – gives a good sense of how things are stabilising. Sentiment is improving steadily, and the mood among many buyers has shifted from anxiety to cautious confidence.
Hopper, however, warned that a further interest rate rise later this week would lead to affordability slipping further out of reach of many first-time buyers as prices pick back up.
“But many wealthier buyers, who tend to be less reliant on mortgage borrowing, and those with a good chunk of equity under their belts, are coming to see the market’s new-found, froth-free equilibrium as a good time to buy,” he pointed out.
Jeremy Leaf, north London estate agent and a former RICS residential chairman, said that contrary to other recent housing market surveys, the Halifax figures showed that we cannot be complacent about recovery as cost-of-living and mortgage worries persist.
“However, there is no doubt that we are much busier than we were a few months ago and the underlying feeling is that we are over the worst and will continue on a relatively even keel despite some ups and downs along the way,” Leaf stated.
According to Kim McGinley, director at Vibe Specialist Finance, it appears that the housing market is displaying more of a correction rather than a crash.
“In the first four months of 2023, sentiment steadily improved as mortgage rates came down and the economic outlook felt less bleak,” she said. “Even another increase in the bank base rate this week may not slow the recovery we’re seeing in mortgage activity and the broader property market.”
Any thoughts on the findings of the latest Halifax House Price Index? Let us know by leaving a comment in the discussion box at the bottom of the page.
