Halifax House Price Index data reveals that UK house prices increased by 0.8% in March, following a 1.2% rise in February. The annual price growth rate slowed to 1.6%, the weakest rate in three and a half years, with the average property now costing £287,880, down 2% from its peak in August 2022.
Sarah Coles, head of personal finance at Hargreaves Lansdown, said the spring bump has brought a second consecutive month of rising house prices, along with a whiff of optimism to the housing market. The weaker annual price growth rate will keep enthusiasm in check, but positive indicators, such as low mortgage rates, rising housing transactions, and robust employment, are encouraging.
Although the inflation figures and subsequent rate rise have halted the gradual fall of rates, they are expected to resume their decline once inflation recedes. Meanwhile, mortgage approvals have picked up slightly, according to Bank of England figures, and the pace of decline in both demand and agreed sales has slowed, according to RICS.
However, Zoopla reported that demand is still down 43% YoY, and sales have fallen 16%. Sellers are having to cut prices by an average of 4% to sell their properties, and the annual growth of asking prices continues to fall.
The high inflation rate and quick rise in prices mean that household budgets are still under pressure, and affordability remains a concern. While the market is showing faint signs of promise, it’s unlikely that we’ve seen the last of price falls.
Iain Crawford, CEO of Alliance Fund, said that the positive outlook for the year ahead is bringing further positivity to the UK property market as it moves away from the uncertainty of last September’s mini budget. Chris Hodgkinson, Managing Director of House Buyer Bureau, commented that although the landscape remains uncertain, the expectation was that 2023 would see an end to the downward trend of house price decline, and this seems to have rung true far earlier than many expected.
The Halifax House Price Index for March was released today.
