Halifax House Price Index April 2023: House prices at tipping point

Sarah Coles, head of personal finance at Hargreaves Lansdown, comments on the publication of the Halifax House Price Index April 2023, showing house prices at tipping point.

Key points from publication:
    • Annual price rises slowed to just 0.1% in April.
    • House prices fell 0.3% in April, following a 0.8% rise in March.
    • The average property now costs £286,896 – down around £7,000 from last summer’s peak.

Sarah Coles said:

“The Halifax figures pour cold water on the growing fires of optimism that had been lit across the property market in recent weeks.

“After clinging onto dwindling annual growth for a few months, the figures are now at a tipping point.

“The spring has produced a wave of positive announcements – from mortgage approvals rising for a second consecutive month, to Nationwide’s 0.5% bump in April, and Zoopla’s claim that demand has hit a high for 2023.

“The RICS residential market survey for March still painted a picture of falling demand, dwindling sales and lower house prices, but there was hope that this could all turn around in April.

“There are still real positives in the market.

“The GfK confidence index shows that people’s belief in the strength of their own financial position has picked up slightly over the past three months.

“Meanwhile, the fact we have so far avoided a recession, and the jobs market is holding up, gives people hope – reflected in Bank of England figures which show we’re prepared to spend our savings at a spectacular pace, and take on new loans.

“Mortgage rates have also fallen significantly from the peak in October last year, which has made a major impact on people’s ability to buy, and how they feel about the affordability of property.

“However, there are still some headwinds, which call into question whether this confidence will endure.

“There’s a chance that once we’ve spent our savings and racked up new debts, even if inflation falls, prices could remain painfully high.

“As more and more people reach the end of mortgage deals, and are forced to remortgage at a higher rate, this could put a squeeze on homeowners that has the potential to dent newfound optimism in the market.”

 

Kindly shared by Hargreaves Lansdown

Main article photo courtesy of Pixabay