Yahoo Finance House prices: March only slowing property growth, not reversing it
House prices fell one per cent in March, according to the latest data, but strong quarter on quarter growth still suggests property valuations are set for a 2024 rebound.
According to the latest figures from Halifax, the average price of a home is £288,430, around £2,900 less than in February.
It follows five months of consecutive rises in property prices.
Nonetheless,two per cent quarter on quarter growth suggests there remains positivity in the sector.
The data mirrors a similar study earlier this week from Nationwide.
In London, the cost of a home grew by 0.4 per cent to £539,917, remaining the most expensive region in the UK to buy a home.
Kim Kinnard, director at Halifax mortgages said a monthly fall is “not entirely unexpected”.
“Particularly in view of the reset the market has been going through since interest rates began to rise sharply in 2022,” she said.
“Despite this house prices have shown surprising resilience in the face of significantly higher borrowing costs.”
She added: “Affordability constraints continue to be a challenge for prospective buyers, while existing homeowners on cheaper fixed-term deals are yet to feel the full effect of higher interest rates.”
“This means the housing market is still to fully adjust, with sellers likely to be pricing their properties accordingly.”
Today’s reading mirrors figures published by Nationwide earlier this week.
The lender said property remained up on an annual basis – by 1.6 per cent – but fell on a monthly basis by 0.2 per cent.
Rightmove reported last month that March saw the highest rise in house prices in 10 months with average price of newly marketed properties rose by £5,279 to £368,000.
It is thought that Brits will continue to hold off buying until interest rates come down from their historic highs.
The Bank of England held them at 5.25 per cent again, with most experts betting they will drop later in the summer.
Mortgage rates have also started rising again following signs that deals were cooling at the start of the year.
Sam Mitchell, chief of Purplebricks, said: “The blip in house prices was caused by a small increase in rates at the start of March, since then we have seen banks compete more aggressively, rates reduce further, inflation come down ahead of expectations, and both viewings and offers levels are ahead of expectations.
“Given the Bank of England’s future guidance is pointing to further cuts we expect prices gradually increase throughout the year until the inevitable uncertainty of the General Election bites probably in October. Sellers should act without delay if they want to take advantage of what should be a busy spring market.”
