Housing market continues to stabilise: Halifax

Posted on Tuesday, May 9, 2023

UK house prices saw a slight dip of 0.3% during April as the market continues to stabilise, with the price of a typical home in the UK now costing £286,896 (compared to £287,891 in March).

According to data released this morning by Halifax, there’s an increasingly mixed picture emerging for house prices across the UK. The four regions of southern England have seen average house prices fall over the last year, with the South East registering the largest dip (- 0.6%, average house price of £387,469).

Typically, it’s these regions (including Greater London, Eastern England and the South West) where buyers face the most expensive average property prices, and therefore the biggest impact of higher borrowing costs.

London continues to have the costliest homes of anywhere in the country at an average of £538,409 (annual rate of growth now -0.2%).

Elsewhere all other regions and nations across the UK saw the rate of annual property price inflation remain in positive territory during April. The West Midlands posted the strongest annual growth of +3.1% (average property price of £249,554).

Northern Ireland (+2.7%, £186,846), Scotland (+2.2%, £201,489) and Wales (+1.0%, £216,559) have also seen average property prices increase year-on-year.

Kim Kinnaird, Director, Halifax Mortgages, said:

“After three consecutive months of growth, the average UK house price fell in April, down by -0.3% or around £1,000 over the month. The rate of annual house price inflation also slowed further to +0.1%, from +1.6% in March, meaning average property prices are largely unchanged from this time last year.

"A typical property now costs £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. 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.

“Alongside a market-wide uptick in mortgage approvals, these latest figures may indicate a more steady environment. However, cost of living concerns remains 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 re-mortgaging their current fixed-rate deals, we should expect some further downward pressure on house prices over the course of this year.”

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

“The UK housing market is regaining its footing after being knocked sideways by last September’s mini-Budget. You can quibble about whether prices are up or down but the big picture is that annual growth is broadly flat and transactions clearly hit their low point in January.

"It should be a steady year, with the impact of a recovering economy kept in check by mortgage rates that are notably higher than 18 months ago. It will also be the most predictable year for the housing market since 2018. As the political temperature rises and a 2024 general election moves onto the radar, switched-on buyers and sellers are acting while the backdrop remains relatively uneventful.”

James Briggs head of personal finance intermediary sales at Together comments:

“After months of subdued activity, house prices stalled in April, falling 0.3% over the past month.

“With lenders adjusting their offers ahead of the Bank of England’s interest rate announcement this Thursday, consumer confidence appears to be remaining weak. However, as we delve further into spring, home renovations are beginning their popular, annual revival so borrowers will be eagerly assessing their options.

“First-time buyers and homeowners keen to begin their spring renovations shouldn’t necessarily be discouraged by the economic conditions. For homeowners, specialist lenders can offer second-charge mortgages which are becoming increasingly popular when it comes to financing home improvements. For first-time buyers, there is a range of schemes on offer, such as shared ownership or right-to-buy mortgages to support that first step onto the property ladder.

“Assessing all options including specialist brokers and lenders, who take into account your personal and financial circumstance whilst often being more flexible can help borrowers secure the finance needed to achieve their home ambitions.”

Via @PropertyReporter