"While activity is likely to cool in the near term, the underlying picture remains one of relative stability, supported by wage growth that continues to outpace house price inflation"
- Amanda Bryden - Halifax
UK house prices edged down 0.1% in April, following a 0.5% fall in March, leaving the average property price at £299,313, according to the latest Halifax House Price Index. Annual growth slowed to 0.4%, down from 0.8% the previous month.
"Average house prices showed little movement in April, edging down by just -0.1% compared to March, with the typical property now costing £299,313," said Amanda Bryden, head of mortgages at Halifax.
"The pace of annual growth also eased to +0.4%. After a strong start to the year, recent global developments have added a greater degree of uncertainty to the outlook. In particular, higher energy prices have fed into inflation expectations, prompting markets to reassess the path for interest rates — a shift that has already pushed up borrowing costs for many buyers."
"This understandably leads to more caution among some households, with the cost-of-living once again front of mind and extra thought being given to planned property moves. Even so, the housing market continues to display the resilience that has been its hallmark in recent years."
"While activity is likely to cool in the near term, the underlying picture remains one of relative stability, supported by wage growth that continues to outpace house price inflation. Another important factor is that the majority of existing homeowners are on fixed-rate mortgages, meaning they are largely insulated from short-term changes in interest rates."
"A slower pace of house price growth may be disappointing news for existing homeowners. However, for those looking to step onto the property ladder, stable prices are helpful, even if higher mortgage rates mean affordability remains stretched. The average price paid by first-time buyers has fallen slightly to £238,908, its lowest level so far this year."
Regional and national breakdown
Regional performance remained sharply divided. Northern Ireland led annual house price growth across the UK at 7.6%, taking average values to £224,851, while Scotland rose 4.0% to £222,448. Wales saw growth slow further, to 0.7% annually, with the typical home now valued at £230,952.
In England, the North continued to outperform. The North East recorded annual growth of 4.5% to £183,445, and the North West gained 3.4%, with average prices reaching £248,945. Southern markets, by contrast, remained under pressure.
London fell 1.4% year-on-year to an average of £536,051, while the South East saw the steepest annual decline, down 2.0% to £383,044.
Industry reactions
Nathan Emerson, CEO of Propertymark, acknowledged the near-term stability while flagging broader risks. "Despite ongoing uncertainty within the economy, it is reassuring to see a position of consistency concerning house prices currently," he said.
"However, it is imperative to note that many people may face future affordability challenges until there is sustained de-escalation concerning current global unrest. The rate of inflation remains a key concern for many people, especially as there is widespread speculation that the Bank of England may potentially need to implement measured base rate increases over the coming months to best regulate potential future financial instability."
"There will likely be a sense of anxiety across the summer months, especially for those with tracker mortgage products, and with mortgage deals that are due to expire. It will be important for people to investigate what new mortgage products might be available to them and to make plans to help navigate around any increased expenditures."
Guy Gittins, CEO of Foxtons, was broadly upbeat. "A very marginal monthly dip in house prices is unlikely to cause concern and reflects the more measured pace of the market seen so far this year, particularly against the heightened turbulence of the wider economic backdrop," he said. "At Foxtons, demand was up in April and we're confident the recent decision to hold the base rate will provide further reassurance to buyers about the overall resilience of the UK property market."
Verona Frankish, CEO of Yopa, pointed to the broader trend as evidence of underlying strength. "A small monthly adjustment is nothing to be concerned about and the underlying strength of the market remains very evident when you look at the broader trend," she said.
"House prices are continuing to hold firm despite ongoing affordability pressures and that's a clear sign that buyer appetite remains strong, particularly amongst those who have adapted to higher borrowing costs and are now keen to press on with their move."
Not everyone shared that confidence. Chris Hodgkinson, managing director of House Buyer Bureau, warned of a widening gap between buyer and seller expectations. "The problem facing the market at the moment is that many sellers are still pricing based on expectation rather than current market reality and that's creating a growing disconnect between buyers and sellers," he said.
"Whilst demand is still there, buyers are far more price sensitive in the current climate and homes that aren't positioned correctly from day one are simply sitting on the market for longer, forcing sellers into larger reductions further down the line."
Marc von Grundherr, director of Benham and Reeves, saw London demand holding up despite national headwinds. "While the market may have paused for breath on a monthly basis, the wider picture remains one of stability and resilience and that's particularly encouraging given the economic uncertainty seen so far this year," he said.
"Buyer demand across London has remained consistent and, with mortgage rates continuing to improve, we expect confidence to strengthen further as we move through the summer market."
James Nightingall of property search service HomeFinder AI noted that the seasonal uptick many had expected failed to materialise. "In April, some house hunters took a break to enjoy the Easter holidays whilst others seized the opportunity to arrange viewings or put in an offer," he said.
"Although buyer interest remains steady overall, the property market hasn't seen the spike in activity usually associated with spring as interest rates and geopolitical developments continue to fuel uncertainty."
Tom Bill, head of UK residential research at Knight Frank, said, “The recent spike in mortgage rates will only put gradual downwards pressure on house prices as more favourable offers that pre-date the Middle East conflict take several months to lapse. It means some buyers are keen to complete while others have seen their spending power reduced."
"We expect house prices to begin falling in the coming months, but modest growth to return by the end of the year. However, that will depend on how long the conflict lasts, to what extent it escalates and how the government responds to the economic shock, whoever is Chancellor at the time of the next Budget.”
