A cooling of the property market is anticipated “in the short term” according to the latest house price data from Halifax, which shows little movement in average property prices.
Price are down by 0.1% in April compared to the previous month, but the “underlying picture remains one of relative stability,” Halifax head of mortgages Amanda Bryden said.
While wage growth continues to outpace inflation the housing market could continue to show a resilience that has become “its hallmark in recent years,” she added.
“After a strong start to the year, recent global developments have added a greater degree of uncertainty to the outlook. In particular, higher energy prices have fed into inflation expectations, prompting markets to reassess the path for interest rates – a shift that has already pushed up borrowing costs for many buyers.
“This understandably leads to more caution among some households, with the cost-of-living once again front of mind and extra thought being given to planned property moves.”
The average price of a property is now £299,313, an annual growth rate of 0.4%. The average price paid by first-time buyers has fallen slightly to £238,908 – the lowest level so far this year.
Regionally, the Halifax report reveals stronger growth in the north of England than the south. In the North East, prices increased by 4.5% over the year to reach £183,445, while the North West recorded annual growth of 3.4% with the average home now costing £248,945.
By contrast, the southern markets continue to see prices fall. The South East is leading the decline, with prices down by 2.0% year on year to £383,044. In London, average values fell by 1.4% to £536,051.
Commenting on the figures, Foxtons CEO Guy Gittins said the agency had seen an increase in demand in April and the “very marginal dip is unlikely to cause concern and reflects the more measured pace of the market” seen this year.
He added: “We’re confident the recent decision to hold the base rate will provide further reassurance to buyers about the overall resilience of the UK property market.”
Verona Frankish, CEO of Yopa, agreed the small monthly adjustment is nothing to be concerned about. “[The] underlying strength of the market remains very evident when you look at the broader trend,” she explained.
“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.”
Jason Tebb, president of OnTheMarket, agreed the market remains resilient. “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 said.
“While affordability concerns remain, rather than retreating from the market, borrowers are adapting and grabbing lower mortgage rates while they can.
“Little movement in average house prices suggests buyers and sellers are adopting a pragmatic outlook and adjusting expectations, rather than a loss of confidence. A market that is not running away with itself is also encouraging for first-time buyers who are vital to enable transactions to take place further up the ladder.
“Our own property sentiment index shows that the market is adapting to change, treating volatility as part of the landscape rather than a reason to delay decisions.”
