UK house prices fall 0.8% in April – Halifax
UK house prices fell by a greater than expected 0.8 per cent last month, according to the latest survey of the property market by mortgage lender Halifax.
Although monthly data tends to be highly volatile, the weak April reading – which was worse than a predicted 0.1 per cent fall – supports a trend reported by other lenders, namely Nationwide, whose own house price index indicated a moderation in growth last month, to 0.2 per cent from 0.7 per cent in March, writes Nathalie Thomas.
The Halifax survey shows prices fell last month following a 2.2 per cent rise in March. The mortgage lender said prices in the three months to April were 1.5 per cent higher than in the previous three months, which marked the smallest quarterly increase since November last year. But prices are still 9.2 per cent higher than in the same period a year ago.
The downturn has been explained by several possible factors. Market experts have suggested that changes in stamp duty for buy-to-let buyers and second-home buyers may have boosted prices in the first three months of the year as purchasers rushed to secure deals before the new higher rates kicked in.
But the forthcoming EU membership referendum and cooling economic growth in the UK have also been blamed for slowing momentum in the property market. Several estate agents, including Foxtons, Countrywide and Savills, have warned that property transactions are likely to fall in the second quarter amid jitters over the outcome of the vote on June 23.
Martin Ellis, Halifax housing economist, said:
House prices in the three months to April were 1.5% higher than in the previous quarter, this rate has halved from 2.9% in March. The annual rate of growth eased from 10.1% to 9.2% in April. Both the quarterly and annual rates are at their lowest since last autumn.
Current market conditions remain very tight as the severe imbalance between supply and demand persists. This situation, combined with low interest rates and rising employment and real earnings, should continue to push house prices up over the coming months.
Weakening sentiment regarding house price prospects and a dip in consumer confidence, however, suggest that annual house price growth may ease.
Chancellor George Osborne warned on the weekend that house prices would take a “significant hit” if Britain votes to leave the EU.