New data from Halifax reveals that only two UK regions, Greater London and the North East, experienced stable annual growth in house prices in March, with no slowdown observed. The average home price in the capital is now £537,250, showing a marginal increase of 0.1% compared to last year.
In the wake of the pandemic-induced desire for spacious living, home buyers are searching for more reasonably priced areas, causing London’s house price growth to lag behind that of the rest of the country.
Throughout the UK, house price growth has decelerated to its lowest point in over three years. As of March, the typical cost of a home in the UK is £287,880, having risen 1.6 percent in the previous year.
The recent findings of Halifax differ from another house cost index released by the Nationwide Building Society the previous week. Nationwide’s index indicates a decrease of 0.8% in house prices in March, the seventh consecutive month of price falls.
Meanwhile, Halifax’s report is based on mortgage approval data, which reflects costs agreed upon between buyers and sellers before the completion of sales.The information includes data from Halifax, Lloyds Bank, and Bank of Scotland mortgage customers. Martin Beck, the head monetary consultant to the EY ITEM Club, noted that the disparity between the two measures makes it challenging to understand the state of the housing market.
A personal finance analyst at Bestinvest, Alice Haine, stated that fixed mortgage rates might continue to decrease due to the positive outlook for swap rates, which are influenced by future bank rate expectations and increased competition among lenders.
However, variable-rate mortgages have risen as they are directly linked to the Bank of England’s headline interest rate. Overall, the property market remains highly affordable based on most measures.
According to Mark Harris, the CEO of SPF Private Clients, mortgage lenders are competing for business by reducing prices on their cheapest five-year fixed-rate mortgages. He added that despite the possibility of another base pace accumulation by the Bank of England, many believe that interest rates are near their peak and borrowers can look forward to more favorable conditions if inflation decreases, as predicted.
Meanwhile, Jason Tebb, the CEO of OnTheMarket.com, a property search website, stated that average property prices remained stable in March, indicating that the housing market is rebalancing calmly and measuredly. He also noted that their data shows that buyer and seller sentiment is improving as the market enters its traditionally busier spring period.
“Prices are broadly stable but will be tested this spring as supply additions and more risen mortgage rates force a quick intake of breath among a growing number of consumers and homeowners,” said Tom Bill, head of UK residential analysis at inheritance agent Knight Frank.
“We hope expenses to drop by a rare percent this year as the evolution to the latest normal for borrowing costs takes place.”
“At the sharp end, sales are still being agreed but are taking longer, not least because there is more choice of stock,” said Jeremy Leaf, a north London estate agent.
“As we enter the critical spring period for the housing market, we don’t expect to see a dramatic change.”
