Hiccup in Halifax house price index as March figures dip – industry reaction

Posted on Monday, April 8, 2024

The latest Halifax Price Index was published last Friday. It showed that house prices were down 1% in March versus February following five months of consistent growth.

However, annually house prices were up +0.3%. On a quarterly basis, house prices have also climbed by 2%.

Kim Kinnaird, Director, Halifax Mortgages said:

“The broader picture is that house prices are up year-on-year, reflecting the opposing forces of an easing cost of living squeeze – now that pay growth is outpacing general inflation – and relatively high interest rates.

“Taking a slightly longer-term view, prices haven’t changed much over the past couple of years, moving in a narrow range since the spring of 2022, and are still almost £50,000 above prepandemic levels.

“Looking ahead, that trend is likely to continue. Underlying demand is positive, as greater numbers of people buy homes, demonstrated by recent rises in mortgage approvals across the industry and underpinned by a strong labour market. And with rental costs rising at record rates, home ownership continues to be an attractive option for those who can make the sums work.

“However, the housing market remains sensitive to the scale and pace of interest rate changes, and with only a modest improvement in affordability on the horizon, this will likely limit the scope for significant house price increases this year.”

The property industry gave its reactions.

Jason Tebb, President,  OnTheMarket:

“With prices dipping after five consecutive monthly rises, it goes to show that buyers remain sensitive on price and find themselves in a good negotiating position. Activity continues to pick up with more enquiries and stock coming to market, as you would expect at this time of year. Buyer confidence is further boosted by cheaper mortgage rates and the expectation that they will come down further.

“However, any price rises will be tempered by what buyers can afford. After many hikes in base rate before it stabilised at 5.25 per cent, borrowers are having to get used to paying more. Sensible pricing, seeking advice from an experienced local agent, is therefore crucial to achieving successful and timely sales.”

Nathan Emerson, CEO,  Propertymark:

“Spring tends to be one of the busiest times of the year for the housing market, and with inflation falling and interest rates remaining static, homebuyers have adjusted to the latest market conditions. This should result in a surge of new buyers, sellers, and properties coming to the market as the year progresses. This was reflected in Propertymark’s latest Housing Insight Report, which found that there has been an 18 per cent increase in the number of new properties coming to the market. However if inflation continues to drop to pre-pandemic levels, Propertymark is hopeful that interest rates will also start to fall, and the whirlwind of economic turbulence will finally settle for everyone once again.”

Matt Thompson, head of sales, Chestertons:

“In March, the property market witnessed steady demand from buyers although some house hunters decided to pause their search in the hope for major incentives to be announced in the Spring Budget. As this wasn’t the case, the majority of these buyers have since resumed their property search. As a result, March concluded the first quarter of the year with a busy property market – particularly in the capital where demand continues to outstrip supply.”

Tom Bill, head of UK residential research,  Knight Frank:

“Since November, ten weeks of recovery in the UK housing market have been followed by ten weeks of drift. Mixed signals around inflation, rising supply and a wave of people rolling off sub-2% fixed-rate mortgages agreed in early 2022 mean the direction of travel for the property market is currently sideways. Once a rate cut appears firmly on the horizon and more mortgage rates start with a 3, we expect stronger demand to push UK prices 3% higher this year.”

Sam Mitchell, CEO, Purplebricks:

“The blip in house prices was caused by a small increase in rates at the start of March, since then we have seen banks compete more aggressively, rates reduce further, inflation come down ahead of expectations, and both viewings and offers levels are ahead of expectations. Given the Bank of England’s future guidance is pointing to further cuts we expect prices gradually increase throughout the year until the inevitible uncertainty of the General Election bites probably in October. Sellers should act without delay if they want to take advantage of what should be a busy spring market.

“March saw an anticipated slowdown in the housing market prompted by a small increase in mortgage rates at the start of the month. We have already seen this trend beginning to reverse and expect to see improving house prices in the months ahead. At the coalface, we are seeing robust viewing numbers and growth in offers that bucks the trend of what was a painful last six months of 2023.”

Nicky Stevenson, MD, Fine & Country:

“An increasingly busy property market helped to prop up prices on an annual basis at the beginning of spring, but the monthly fall shows there is still some turbulence. Buyers are in a strong position and vendors are more open to negotiation, which is bringing prices down in some areas.

“The market is proving to be resilient in the face of ongoing economic challenges, and February’s mortgage approvals reached their highest levels since September 2022 thanks to activity levels starting to bounce back. Demand has remained steady since, with a strong showing over the Easter bank holiday weekend.”

Foxtons CEO, Guy Gittins:

“House prices have continued to creep up since the start of the year and this improvement in market health has been driven by the returning appetite of UK homebuyers. While higher mortgage rates certainly remain an obstacle, there has been a dramatic increase in buyer activity levels and it’s not just in the form of enquiries and viewings, with more offers also being made.

“With the general expectation that interest rates are set to fall sooner rather than later, we anticipate that market conditions will only continue to improve as buyer confidence builds.”

Via @PropertyIndustryEye