While UK house prices have risen by 2.2% on an annual basis, month-by-month they fell by 3.1% in April, according the latest House Price Index from Halifax. The average price for a house in the UK is now £220,962.
The Halifax reports that April’s fall, following a 1.6% rise in March, reflects the “volatility in the short term”. The prospect of imminent increasing interest rates may have held prospective buyers back, as well as the extreme weather, it says.
Referring to a recent monthly report from the Royal Institution of Chartered Surveyors (RICS) Halifax says supply remains tight. The stock of homes available for sale in the UK edged up in March, but remains close to record low levels with new instructions declining for the 25th month in succession.
Halifax managing director Russell Galley commented:
“Housing demand has softened in the early months of 2018. However, the UK labour market is performing strongly with unemployment continuing to fall and wage growth finally picking up. These factors should help to ease pressure on household finances and as a result we expect annual price growth will remain in our forecast range of 0-3% this year.”
Consumer confidence in the housing market is still low, he says. The latest Halifax Housing Market Confidence Tracker shows that optimism in the housing market remains at a five-year low, echoing the subdued house price performance and activity levels since the end of last year.
Yet the majority of consumers believe house prices will increase over the next 12 months, and fewer people are now predicting a fall in house prices compared with six months ago.
The survey also reveals that potential Bank of England Base Rate increases are not a major concern for mortgage holders, with less than a third concerned about the possibility of rising interest rates affecting their ability to meet their monthly repayments.
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