UK house prices continue to tread water in April: Halifax

Posted on Tuesday, May 7, 2024

The latest figures from Halifax show that the housing market is still finding its feet in a sea of higher interest rates. 

This morning's figures from Halifax have revealed that average UK house prices rose by +0.1% in April on a monthly basis, after a fall of -0.9% in March.

A typical UK home now costs £288,949 compared to £288,781 in March - a rise of just £168.

Amanda Bryden, Head of Mortgages, Halifax, said: “UK house prices held steady in April, rising on a monthly basis by just +0.1% (less than £200 in cash terms). Annual growth rose to +1.1%, from +0.4% in March, though this can be attributed to the base effect of weaker price growth around this time last year.

“The average property now costs £288,949, compared to £287,244 at the start of the year. While there is always much scrutiny of monthly price changes – and a degree of volatility is to be expected given current market conditions – the reality is that average house prices have largely plateaued in the early part of 2024.

“This reflects a housing market finding its feet in an era of higher interest rates. While borrowing costs remain more expensive than a few years ago, homebuyers are gaining confidence from a period of relative stability. Activity and demand is improving, evidenced by greater numbers of mortgage applications so far this year, while at an industry level mortgage approvals have reached their highest point in 18 months."

National and regional breakdown

Northern Ireland remains the strongest performing nation or region in the UK, with house prices up by +3.4% on an annual basis in April, though this slowed from +4.1% in March. Properties in Northern Ireland now cost an average of £192,502.

In Wales, annual property price growth slowed to +1.1% in April, from +1.9% in March, with the average home now costing £218,775. Meanwhile, Scottish house prices rose +1.5% year-on-year to stand at £204,579.

The North West continues to see the strongest growth in England, up by +3.3% on an annual basis to

North / South divide

Annual price falls are predominately found in the south of England, as the ‘North-South’ divide across English regions is sustained. Properties in Eastern England recorded the biggest decline of -1.1%, with homes selling for an average of £329,723, a drop of £3,541 over the last year.

London remains the most expensive region in the UK to buy a home, with an average price of
£539,336. However, prices in the capital have been relatively flat over the last year, up by just +0.1%.

Amanda Bryden adds: “Our recent research also found that buyers are adjusting their expectations, with first-time buyers in particular compensating for higher borrowing costs by targeting smaller properties. We see this reflected in property prices for the first few months of this year, with the value of flats rising most sharply, closing the ‘growth gap’ on bigger properties that’s existed for most of the last four years.

“However, we can’t overlook the fact that affordability constraints are still a significant challenge, for both new buyers and those rolling off fixed-term deals. Mortgage rates have edged up again in recent weeks, primarily as a result of expectations around future Bank of England base rate changes, with markets now pricing in a slower pace of cuts.

“If, as is still expected, downward moves in Bank Rate come into play later this year, fixed mortgage rates should fall. Combined with the resilience displayed by the housing market over recent months, we now expect property prices to rise modestly over the course of 2024.”

Tom Bill, head of UK residential research at Knight Frank commented: “House prices continue to move sideways as higher mortgage rates hit market momentum.

"As the prospect of the first rate cut since March 2020 drifts further into the distance, borrowing costs have edged higher and budgets have been squeezed. A short-lived burst of positivity in the early weeks of this year led to higher supply, increasing downward pressure on prices.

"A wave of homeowners currently rolling off sub-2% mortgages is adding to the financial pressures in the system. As a summer rate cut moves onto the horizon, we expect UK house prices to respond and rise by 3% in 2024.”

Nathan Emerson CEO at Propertymark comments:  “Buyers and sellers are starting to accept the new reality of the housing market in the face of current interest rate levels, and it is encouraging to see that house prices are increasing, giving sellers the confidence they need to put their house onto the market during what will be a busy time for the housing market.

"Propertymark’s latest Housing Insight Report showed there was an 18 per cent increase in new properties coming to the market.

"Also, the number of mortgage approvals made to home buyers increased from 56,100 in January to 60,400 in February, according to recent Bank of England figures. Hopefully, the UK Government will take the initiative and encourage growth in the housing market by meeting its own housing targets.”   

Foxtons CEO, Guy Gittins, says: “Although UK homebuyers continue to wait patiently for interest rates to fall, this has not dampened the growing level of market confidence that has been building since the start of the year and, in fact, many buyers are already pressing ahead with their plans to purchase with hopes of mortgage rate reductions on the horizon.

"Since a hold on interest rates in September last year mortgage approvals have been climbing, there’s been an uplift in viewing activity and more offers are being made, and so it’s clear that both buyers and sellers are responding favourably to a greater degree of market stability.

"This bodes very well for the year ahead and we only expect conditions to improve further as spring turns to summer and these initial offers reach completion.”

Director of Benham and Reeves, Marc von Grundherr, commented: “The property market is arguably a little out of shape following a sustained period of subdued activity as a result of higher mortgage rates. And so while we’ve seen a string of positive house price reports in recent months, we’re yet to see the pace lift with respect to monthly growth.

"But while the road ahead may be a challenging one, we remain in a far better place than we were this time last year and that sets a solid foundation for the market to now kick on and post a stronger performance in 2024.”

Matt Thompson, head of sales at Chestertons, says: “The uplift in market activity typically associated with spring was slightly delayed this year but became more evident over the course of April. Compared to March, we saw an increase in the number of London house hunters which also led to sellers feeling more confident about putting their property up for sale.

"Still, demand continued to outweigh supply in April which gave the majority of sellers the upper hand during price negotiations.”

Jeremy Leaf, north London estate agent and a former RICS residential chairman, says: “We are not surprised to see house prices up a bit, then down a bit – a pattern which we are finding is repeated on the ground, reflecting that some sellers are more realistic than others.

“The market has lost a little momentum in the last month or so which has chimed with recent modest increases in mortgage rates as well as listings. However, underlying confidence remains fairly strong for now at least, allowing purchasers the opportunity to perhaps negotiate a little harder where possible."

Via @PropertyReporter