FX.co ★ UK Halifax House Prices Edge Up In April

UK property prices saw a nominal increase in April due to potential rises in the interest rate affecting the housing market, according to data released by mortgage provider Halifax. House prices demonstrated a lukewarm 0.1% rise in April, disappointing predictions of 0.2% growth. Though weak, this growth is an improvement from the 0.9% decrease observed in March.

Yearly data indicates a rise in property price growth to 1.1%, up from 0.4% in the previous month. However, the surge can also be attributed to the base effect of slower price growth observed during the same period last year.

The average property is now worth £288,949, marking an increase from the £287,244 value noted at the beginning of the year.

In the words of Halifax Head of Mortgages, Amanda Bryden, average house prices seem to have largely plateaued in the early part of 2024. This stability in the housing market coincides with an era of higher interest rates.

Recent studies suggest homebuyers, primarily first-timers, are adjusting their expectations to accommodate higher borrowing costs, which is evident in their shifting preference to smaller properties. Despite these changes, Amanda Bryden continued to stress that affordability remains a significant hurdle for both new buyers and those transitioning from fixed-term deals.

In recent weeks, mortgage rates have again started to creep up due to changing expectations surrounding the future Bank of England base rate. Bryden suggested that, given future decreases in the bank rate and the housing market’s displayed resilience in recent times, property prices might see a moderate rise throughout 2024.

The Bank of England is slated to maintain its benchmark rate at 5.25%, the highest since early 2008. The results of the monetary policy meeting will be available on May 9.