House prices held steady in April, according to the latest figures from Halifax, after a 0.9 per cent drop in March.
The average property rose just 0.1 per cent between March and April, which in cash terms is less than £200.
A typical house in the UK now costs £288,949 compared to £287,244 at the start of the year, according to Halifax.
House prices remain stable in April: the value of the average house rose by just 0.1% month-on-month, less than £200 in cash terms, but more than the fall recorded in March.
Figures from Halifax suggest prices remain resilient despite rising mortgage rates since early February.
Last week, rival Nationwide Index reported that home prices fell for the second straight month in April, saying rising mortgage rates are putting off many would-be buyers.
However, recent research from Halifax found that buyers are adjusting their expectations, with first-time buyers in particular offsetting higher borrowing costs by targeting smaller properties.
The indices give different figures because they are based on the mortgages granted by each lender.
The lowest five-year fixes have gone from less than 3.9 percent to more than 4.35 percent since February, but it appears that more borrowers are starting to accept this “new normal” and stop waiting for rates to drop. interest rates.
Halifax mortgage director Amanda Bryden believes the latest figures reflect a housing market that is “finding its feet” again in an era of higher interest rates.
The average property now costs £288,949, compared to £287,244 at the start of the year.
She said: ‘Although borrowing costs remain more expensive than a few years ago, homebuyers are gaining confidence from a period of relative stability.
‘Activity and demand are improving, as evidenced by the increased number of mortgage applications so far this year, while industry-wide mortgage approvals have reached an 18-month high.
“We see this reflected in property prices during the first months of this year, with the value of flats increasing most sharply, closing the ‘growth gap’ for larger properties that has existed for most of the years.” last four years.”
But rising mortgage rates are just one factor putting downward pressure on home prices right now. There has also been a glut of homes coming onto the market.
Jonathan Hopper, chief executive of Garrington Property Finders, said: “The housing market is becoming increasingly adept at rolling with the punches, and April data from Halifax suggests prices have started to find a new footing.”
‘The big change this spring has been the increase in supply. In some areas, the number of homes put up for sale has gone from a trickle to a flood.
‘Many estate agents report that the number of homes coming onto the market is four times greater than the number of potential buyers showing interest.
“This abundance of supply is doing two things: decisively tilting the balance of bargaining power in favor of buyers and applying downward pressure on prices.”
The reality is that average house prices have largely stabilized by early 2024.
> Read: Experts say mortgage rates could stay high longer than expected
Mortgage approvals for home purchases rose for six consecutive months in March to 61,300, according to the latest figures from the Bank of England, up 20 per cent on a year ago.
While many buyers are heading toward smaller homes due to higher rates, others are heading to more affordable areas.
“There is a growing awareness among house-movers that higher borrowing costs are now a feature of the medium-term, rather than short-term, moving landscape,” Hopper added.
Jonathan Hopper, chief executive of buying agency Garrington Property Finders, believes we are likely to see winding price growth over the coming months.
‘As a result, the number of buyers is increasing, but with the average cost of borrowing rising above levels seen at the start of the year, first-time buyers in particular are seeing their affordability pushed to the limit and, as a result, remain extremely price sensitive. .
‘That’s why we’re seeing prices rising faster in regions where affordability is better.
‘Over the last year, average prices rose by 1.5 per cent in Scotland and 3.3 per cent in the north-west of England, but fell by 1.1 per cent in the east of England.
‘With such a wide gap (4.5 per cent) between the best and worst performing areas, buyers need local data on which to base their plans, as data from national headlines can be misleading.
“Regional differences are creating strong buying opportunities, but across the UK we are likely to see changes in price growth over the coming months as we wait for mortgage rates to start to fall again.”
Some real estate agents are a little more optimistic about the outlook for house prices.
Verona Frankish, chief executive of Yopa, said: “Last week the Bank of England reported that mortgage approvals have increased for the sixth consecutive month and while the market may still be regaining its footing, it is just a matter of time”. “before this increase in buyer demand begins to drive a much stronger level of house price growth.”
Guy Gittins, chief executive of Foxtons, added: “Since interest rates were suspended in September last year, mortgage approvals have increased, there has been an increase in viewing activity and more offers are being made, so It is clear that both buyers and sellers are responding favorably to a greater degree of market stability.
“This bodes very well for next year and we only hope that conditions improve further as spring gives way to summer and these initial offerings are completed.”
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