Prices have dipped, but the housing market remains stable, according to Halifax.

Halifax published its House Price Index for April on 9 May, revealing that the average house price decreased by 0.3% in April, following a 0.8% rise in March. Annual house price growth slowed to 0.1% compared to 1.6% in March.

The typical UK property now costs £286,896 compared to £287,891 in March. ‘A typical property now costs £286,896, which is around £7000 below last summer’s peak, though still some £28,000 higher than two years ago,’ says Kim Kinnaird, Director Halifax Mortgages. ‘House price movements over recent months have largely mirrored the short-term volatility 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.’

Stable mortgage rates

Halifax says that mortgage rates are stabilising, and mortgage approvals have risen. ‘The economy has proven to be resilient, with a robust labour market and consumer price inflation predicted to decelerate sharply in the coming months,’ adds Kinnaird. ‘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.’

Kinnaird adds: ‘Alongside a market-wide uptick in mortgage approvals, these latest figures may indicate a more steady environment. However, the 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 the year.’

Rising mortgage approvals

The latest Bank of England figures show that the number of mortgage approvals for house purchases increased in March by 17.9% to 52,011. Year-on-year, the March figure was 25.5% below March 2022.

In contrast to existing house prices, new build properties have risen by 3.5% year on year. The first-time buyer market is also proving to be more resilient, with prices up on average by 0.7% over the last year.

On a regional basis, Halifax describes the situation as ‘mixed’. The South East has seen the largest dip in prices of 0.6% over the last year compared to the four regions of Southern England, while the West Midlands showed annual growth of 3.1%.

We will keep you informed of further market updates, and if you’d like mortgage advice, please contact us.

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