Property price growth bounced back in April, up 5% over three month period

The housing market in the UK has seen a boost with prices in the three months to April some 5% higher than the same period in 2018, the latest lender index shows.

Month on month prices were up 1.1% and in the latest quarter they were 4.2% higher than in the preceding three months, according to the data from the Halifax.

The average house price is now £236,619, up from a decade ago when it was £154,663, the low point following the 2008 financial crash. Since then there has been an increase of £81,956, which reflects a 4.3% average annual increase.

The Halifax index report says that the sharp 5% rise in April’s annual change figure comes against the backdrop of a particularly low growth rate over the corresponding period in 2018, impacting year on year comparisons.

Russell Galley, Halifax managing director, pointed out that this also factors in a notably high growth figure recorded in February this year, driven by a higher volume of London sales and more expensive new build properties.

But he also pointed out that the index has seen a weaker pace of growth over the last three years, which is consistent with the easing of transactions volumes and housing market activity reflected in RICS, Bank of England and HMRC figures.

‘Looking further back, this April also marks 10 years since the lowest point of the Halifax house price index following the financial crash in 2008. Over the past decade annual house price growth has seen the average price increase by £81,956, or an average rise of 4.3% each year,’ he added.

According to Sam Mitchell, chief executive officer of online estate agents Housesimple, there has been an up and down pattern on a monthly basis since last September. ‘This bumpy ride is symptomatic of a property market that continues to be held back by low stock levels and ongoing uncertainty around Brexit which is making buyers hesitant to commit,’ he said.

‘On the ground, we continue to see a clear North/South divide, with the London market struggling to gain a foothold, while many areas in the north are showing a healthy level of sales, thanks to the attraction of more affordable housing, particular family homes, and thriving local economies,’ he explained.

‘Looking at the next few months, with the Brexit deadline extended until 31 October, we could well see a late Spring bounce, as sellers and buyers take advantage of this window of opportunity while there is less political turmoil swirling around, to progress a sale or purchase,’ he added.

Tomer Aboody, director of property lender MT Finance, believes that the figures are encouraging, reflecting that people are now coming to the conclusion that whatever happens with Brexit they just want to get on with things. ‘There is a positive attitude out there from estate agents to valuers to lenders, everyone is busier with transactions, just as you would expect for this time of year,’ he said.

‘Those people who have been looking to buy for a while are now realising that the opportunity to move now is as good as any. Mortgage rates are extremely low and interest rates are unlikely to rise anytime soon, even though Bank of England Governor Mark Carney has been warning that it could happen in the future,’ he pointed out.

‘Longer fixes are looking attractive for those families who need to move on and want some security from potential rate rises in a few years. When we get to October and Brexit looms again, transactions will probably fall off again as jitters return. But for now, with Brexit kicked into the distance, people are transacting and getting on with their lives,’ he added.

Jeremy Leaf, north London estate agent and a former RICS residential chairman, pointed out that the Halifax index is always respected, not least because of its longevity and breadth of coverage. ‘These numbers are no exception but confirm what we are seeing, a spring bounce but not as great as we might have expected,’ he said.

‘The market is quite volatile, bearing in mind the fall in prices in March. The price increases recorded are probably more to do with shortages of stock and lower transactions than sustainable market strength,’ he added.

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