The latest Halifax House Price Index gave estate agents renewed optimism last week amid the ongoing market crash debate after the data suggested values are still growing, although at a slower rate.
Halifax’s data for March put monthly growth at 0.8% while prices slowed from 2.1% in February to 1.6% last month.
That is the weakest rate of annual growth since October 2019 and puts the typical UK property price at £287,880.
The figures are also at odds with the Nationwide House Price Index which suggested prices were down 3.1% annually in March.
This will reignite the debate about a house price crash in the UK.
Kim Kinnaird, director, Halifax Mortgages, said: “This is the weakest rate of annual growth in nearly three-and-a-half years, having fallen markedly since June 2022’s peak of 12.5%.
“However, overall these latest figures continue to suggest relative stability in the housing market at the start of 2023 and align with many other recent industry surveys and data.
“This has been characterised by a partial recovery in activity and transactions, especially when compared to the significant drops seen at the end of last year, with latest Bank of England data showing mortgage approvals rising for the first time in six months.
“The principal factor behind this improved picture has been an easing of mortgage rates.
“It’s also important to recognise that the labour market, a key indicator for house prices, remains strong, with unemployment at a historical low of 3.7%, and pay growth continues to look robust. “Predicting exactly where house prices go next is more difficult.
“While the increased cost of living continues to put significant pressure on personal finances, the likely drop in energy prices – and inflation more generally – in the coming months should offer a little more headroom in household budgets.”
Kinnaird added that while the path for interest rates is uncertain, she said mortgage costs are unlikely to get significantly cheaper in the short term and the performance of the housing market will continue to reflect these new norms of higher borrowing costs and lower demand.
She added: “Therefore, we still expect to see a continued slowdown through this year.”
Commenting on the data, Simon Gerrard, a former NAEA president and managing director of Martyn Gerrard, said: “Buyers should tune out the negative noise around price growth and keep it front of mind that purchasing a house is a long-term investment.
“They should focus less on the near-term fluctuations in the market and more on long-term value, which I guarantee will follow an upward trend over the next five to ten years. Lulls in buyer confidence have historically proven to be minor blips in the bigger picture, and this is likely the case in the current market.
“The real challenge we are facing continues to be the lack of available supply and a dire scarcity of new development, which has likely prevented sharper drops in growth in recent months. The Levelling up Secretary himself recently remarked on the government’s utter failure to fix the housing system.
“If his pledge to fix the problem is going to be successful, it must be led by support for new development, and the government must stop pandering to NIMBYs and local councils who are opposed to housebuilding. I hope that the latest housing minister is able to step up to the task and deliver, given the last five haven’t even made it past the six-month mark. If the government doesn’t get serious about housing now, the next generation of home buyers in this country will simply find there are no affordable homes to buy.”
Nathan Emerson, chief executive of agency trade body Propertymark, added: “Estate agents are seeing a very steady picture. Whilst winter saw a slight decline in activity and therefore prices, spring brought new activity. This trend is normal as the market flows with seasonal changes in buyer behaviour.
"We have plenty of homes coming to the market which shows sellers are confident and that’s the key. Prices have adjusted to rising interest rates curbing affordability, but as we head into April and May, prices may pick up as more buyers will be on the move.”