House prices in the UK experienced a slight decline for the second consecutive month in April, according to Halifax. The average property value fell to £299,313, marking a modest decrease of £296 from March. This trend reflects a cautious market environment amid ongoing economic uncertainties.
April sees modest price dip and slower annual growth
Halifax reported that house prices edged down by 0.1% in April, continuing the downward trend observed in March. On an annual basis, growth slowed to 0.4%, down from 0.8% the previous month. This deceleration follows a relatively strong start to the year but signals a more subdued housing market moving forward.
First-time buyers benefited from the lowest average price recorded so far this year, paying £238,908 in April. This figure highlights the ongoing challenges and opportunities for new entrants to the property market.
Market outlook clouded by global and economic factors
Amanda Bryden, head of mortgages at Halifax, commented on the uncertain outlook: “After a strong start to the year, recent global developments have added a greater degree of uncertainty to the outlook.” She pointed to rising energy prices as a key factor influencing inflation expectations and prompting markets to reassess interest rate trajectories. This reassessment has already increased borrowing costs for many prospective buyers.
Despite these challenges, Bryden emphasised the resilience of the housing market: “While activity is likely to cool in the near term, the underlying picture remains one of relative stability, supported by wage growth that continues to outpace house price inflation.” This suggests that although the market may slow, fundamental economic factors provide some support.
Regional variations in house price growth
Halifax data reveals notable regional disparities in house price trends. Northern Ireland led the way with the strongest annual growth of 7.6%, pushing the average home price to £224,851. Scotland followed with a 4.0% increase, bringing average prices to £222,448, while Wales saw modest growth of 0.7%, with typical properties valued at £230,952.
In England, the North East recorded a 4.5% annual rise, with average prices reaching £183,445. The North West also saw growth of 3.4%, with average homes priced at £248,945. Conversely, the South East experienced a 2% annual decline, with average property values falling to £383,044. London prices decreased by 1.4%, settling at £536,051.
Industry perspectives on the current market
Nathan Emerson, chief executive of Propertymark, noted the market’s consistency despite economic uncertainty: “It is reassuring to see a position of consistency concerning house prices currently.” However, he warned of potential affordability challenges ahead, linked to inflation and possible base rate increases by the Bank of England to manage financial stability.
Tom Bill, head of UK residential research at Knight Frank, observed that recent mortgage rate hikes would gradually pressure house prices downward. He explained that some buyers are motivated to complete purchases before favourable mortgage deals expire, while others face reduced spending power. Bill anticipates house prices to fall in the coming months, with modest growth returning by year-end.
Jason Tebb, president of OnTheMarket, highlighted ongoing buyer resilience: “Despite challenging economic conditions and political uncertainty, needs-driven buyers and sellers who may have put moves on hold last year are showing resilience and remain focused on transacting.” He added that borrowers are adapting to affordability pressures by securing lower mortgage rates where possible.
Guy Gittins, CEO of Foxtons, described the slight monthly dip as unsurprising and reflective of a measured market pace amid broader economic turbulence. He reported increased demand at Foxtons in April and expressed confidence that the Bank of England’s decision to hold the base rate would reassure buyers about the market’s resilience.
Verona Frankish, CEO of Yopa, echoed this sentiment, stating: “House prices are continuing to hold firm despite ongoing affordability pressures and that’s a clear sign that buyer appetite remains strong, particularly amongst those who have adapted to higher borrowing costs and are now keen to press on with their move.”
Marc von Grundherr, director at Benham and Reeves, emphasised market stability despite economic uncertainty, noting consistent buyer demand in London and improving mortgage rates that should bolster confidence through the summer.
Source: Based on reporting from Property118
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Source: www.property118.com
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