Annual house price growth holds steady at 2.6% say Halifax

Annual house price growth holds steady at 2.6% say Halifax

  • House prices in the three months to March were 2.6% higher than in the same three months a year earlier 
  • In the latest quarter (January to March) house prices were 1.6% higher than in the preceding three months (October to December)
  • On a monthly basis, house prices fell by 1.6%
  • The average house price is now £233,181

The latest analysis of UK house prices from Halifax have shown that, during Q1, prices were 2.6% higher than in the same three months of 2018. 

When measured quarterly, prices saw a 1.6% rise in Q1 compared to Q4 2018. House prices fell by 1.6% on a monthly basis, rebalancing the 5.9% rise seen in February. 

Russell Galley, managing director at Halifax, said: “The average UK house price is now £233,181 following a 1.6% monthly fall in March. This reduction partly corrects the significant growth seen last month and again demonstrates the risk in focusing too heavily on short-term, volatile measures. Industry-wide figures show that the number of mortgages being approved remains around 40% below pre-financial crisis levels, and we know that lower levels of activity can lead to bigger price movements. 

The more stable measure of annual house price growth rose slightly to 2.6% and is still within our expectation for the year. The need to build up a deposit before getting a mortgage is still a challenge for many looking to buy a property. However, the combined effect of fewer houses for sale and fewer people looking to buy continues to support prices in the long-term.

Annual house price growth holds steady at 2.6% say Halifax

These conflicting challenges, when combined with the ongoing uncertainty around Brexit, have had an impact across the country but most notably in London, meaning that we continue to expect subdued price growth for the time being.” 

As ever, the property industry was quick to react. Here’s what they’re saying. 

Tomer Aboody, director of property lender MT Finance, says: “March has been dominated by Brexit so the monthly fall in property prices comes as no surprise. For the past couple of years March was flagged up as the date when we would get Brexit and people have been too busy watching the political shenanigans on television to go out and view houses. 

‘The Brexit saga is such a debacle and until it gets sorted, one way or another, few people are going to do anything. There are fewer enquiries out there and fewer people want to sell. Less stock means values will go down – those selling are those who have to sell and may therefore take a lower price. Those who are brave enough to buy believe nothing is going to change in the future so they are going to take advantage of the uncertainty.” 

Jeremy Leaf, north London estate agent and a former RICS residential chairman, says: “Yet another set of figures demonstrating better than expected resilience of the UK housing market but also the dangers of reading too much into one month’s figures. On the ground, we are seeing more buying activity in the buildup to the traditionally busier Spring market but it is patchy, encouraging in some areas, disappointing in others, even sometimes very close to one another. 

On the other hand, many sellers are still cautious, awaiting a small sign at least that their Brexit nightmare will soon be over and they will have more confidence about taking on additional debt.” 

Danny Belton, Legal & General Mortgage Club, had this to say: “The stable level of house price growth is creating a favourable environment for first-time buyers. This is being supported by increased innovation and competition in the mortgage market, allowing borrowers to choose from a wide range of affordable products. 

Government schemes also play a vital role, helping borrowers who are struggling to raise a deposit step onto the property ladder. For those unsure how to make their homeownership dream a reality, speaking with an independent mortgage adviser is a great place to start. Whether looking for that first, next, or last home, advisers can make a valuable difference to a borrower’s journey.” 

Annual house price growth holds steady at 2.6% say HalifaxJeff Knight, Marketing Director for Foundation Home Loans commented: “While a lack of clarity over Brexit decisions may be a cause for concern for some, in general the market is proving its resilience with activity ticking over – even if at a slower pace than we usually see at this time of year. First-time buyers and those keen for discounted prices in their next move would be wise to snap up purchases sooner rather than later. That said, a dreary supply of properties on both the rental and purchasing side not only continues to fall short of demand but will further inflate prices making affordability even trickier.”

Key Facts Housing Activity 

Monthly UK home sales remain steady. February saw 101,780 home sales, which, as for January, was very close to the 5 year average of 101,135. When comparing sales in December to February, against September to November there is a 0.4% drop. February home sales were 2.8% above the previous 12 month average. (Source: HMRC, seasonally-adjusted figures) 

In February mortgage approvals fell compared to January. Bank of England industry-wide figures show that the number of mortgages approved to finance house purchases – a leading indicator of completed house sales – fell 3.5% to 64,337. This compares to a rise of 3.6% in the previous month. As a result, the mortgage approval figure is back to being very close to the December figure. The February rate is 1892 below the 5 year average monthly approval rate of 66,229, and is 740 below the previous 12 month average. (Source: Bank of England, seasonally-adjusted figures) 

Demand for and supply of housing remains subdued. The RICS UK Residential Market Survey again showed a drop on nearly every measure reviewed. The average stock per surveyor is now 41.7, and is now at its lowest ever level. New enquiries, instructions and sales all fell again in the month. Price expectations and sales expectations showed a small improvement compared to January, but both expectations remain firmly negative. (Source: Royal Institution of Chartered Surveyors’ (RICS) monthly report