Halifax HPI: UK house prices hold steady in April

The Halifax HPI for April 2024 has been published, showing that UK house prices have held steady for the month.

Key points from publication:

• • Average house price rose by +0.1% in April on a monthly basis, after a fall of -0.9% in March
  • Property prices grew by +1.1% annually vs +0.4% last month
  • Typical UK home now costs £288,949 compared to £288,781 in March
  • Northern Ireland remains strongest performing nation or region in the UK

Key indicators:

Amanda Bryden, Head of Mortgages, Halifax, said:

“UK house prices held steady in April, rising on a monthly basis by just +0.1% (less than £200 in cash terms).

“Annual growth rose to +1.1%, from +0.4% in March, though this can be attributed to the base effect of weaker price growth around this time last year.

“The average property now costs £288,949, compared to £287,244 at the start of the year.

“While there is always much scrutiny of monthly price changes – and a degree of volatility is to be expected given current market conditions – the reality is that average house prices have largely plateaued in the early part of 2024.

“This reflects a housing market finding its feet in an era of higher interest rates.

“While borrowing costs remain more expensive than a few years ago, homebuyers are gaining confidence from a period of relative stability.

“Activity and demand is improving, evidenced by greater numbers of mortgage applications so far this year, while at an industry level mortgage approvals have reached their highest point in 18 months.

“Our recent research also found that buyers are adjusting their expectations, with first-time buyers in particular compensating for higher borrowing costs by targeting smaller properties.

“We see this reflected in property prices for the first few months of this year, with the value of flats rising most sharply, closing the ‘growth gap’ on bigger properties that’s existed for most of the last four years.

“However, we can’t overlook the fact that affordability constraints are still a significant challenge, for both new buyers and those rolling off fixed-term deals.

“Mortgage rates have edged up again in recent weeks, primarily as a result of expectations around future Bank of England base rate changes, with markets now pricing in a slower pace of cuts.

“If, as is still expected, downward moves in Bank Rate come into play later this year, fixed mortgage rates should fall.

Combined with the resilience displayed by the housing market over recent months, we now expect property prices to rise modestly over the course of 2024.”

Nations and regions house prices:

Northern Ireland remains the strongest performing nation or region in the UK, with house prices up by +3.4% on an annual basis in April, though this slowed from +4.1% in March. Properties in Northern Ireland now cost an average of £192,502.

In Wales annual property price growth slowed to +1.1% in April, from +1.9% in March, with the average home now costing £218,775. Meanwhile Scottish house prices rose +1.5% year-on-year to stand at £204,579.

The North-West continues to see the strongest growth in England, up by +3.3% on an annual basis to £231,599.

Annual price falls are predominately found in the south of England, as the ‘North-South’ divide across English regions is sustained. Properties in Eastern England recorded the biggest decline of -1.1%, with homes selling for an average of £329,723, a drop of £3,541 over the last year.

London remains the most expensive region in the UK to buy a home, with an average price of £539,336. However, prices in the capital have been relatively flat over the last year, up by just +0.1%.

Housing activity:

• • HMRC monthly property transaction data shows UK home sales increased in March 2024 on a month ago. UK seasonally adjusted (SA) residential transactions in March 2024 totalled 84,200 – up by 1.4% from February’s figure of 83,040 (up 19.6% on a non-SA basis). Quarterly SA transactions (January 2024 – March 2024) were approximately 1.5% higher than the preceding three months (October 2023 – December 2023). Year-on-year SA transactions were 6.5% lower than March 2023 (8.6% lower on a non-SA basis). (Source: HMRC)
  • Latest Bank of England figures show the number of mortgages approved to finance house purchases increased in March 2024, by 1.4% to 61,325. Year-on-year the March figure was 20.1% above March 2023. (Source: Bank of England, seasonally-adjusted figures)
  • The RICS Residential Market Survey results for March 2024 show steady improvements in buyer demand and new listings. New buyer enquiries posted a third consecutive net balance positive reading of +8% (up from +4% last month), with agreed sales broadly stable with a net balance of -5% (from -4%). New instructions reported a fourth consecutive net balance reading of +13% (from +20%). (Source: Royal Institution of Chartered Surveyors (RICS) monthly report)

UK house prices Historical data National: All Houses, All Buyers (Seasonally Adjusted):

Next publication:

The next Halifax House Price Index for May 2024 will be published at 07:00 on Friday, 7 June 2024.

Kindly shared by Halifax