House price growth has been cut in half due to escalating mortgage costs influenced by the Middle East conflict, according to the latest report by Halifax. In April, national house prices only saw a 0.4% increase year-on-year, a significant slowdown from the 0.8% growth in March.
Amanda Bryden, the head of mortgages at Halifax, attributed this deceleration to recent global uncertainties, particularly driven by surging energy prices impacting inflation expectations. Consequently, interest rates are being reevaluated, leading to higher borrowing expenses for potential buyers and causing some households to proceed cautiously with property decisions.
Despite the slowdown, there are emerging opportunities for individuals aiming to enter the property market, as the average price paid by first-time buyers hit its lowest point this year. The UK’s average house price experienced a 0.1% decline in April, settling at £299,313, following a 0.5% drop in March, as reported by Halifax.
Halifax highlighted that Northern Ireland leads in annual house price growth at 7.6%, with Scotland following closely with a 4.0% increase. Conversely, Wales has witnessed a slowdown, with only a 0.7% annual growth. In England, robust price growth is concentrated in the northern regions, with the North East and North West recording 4.5% and 3.4% annual increases, respectively.
Sarah Coles, the head of personal finance at broker AJ Bell, advised against waiting for further price drops, emphasizing the unpredictable nature of the market. Mortgage approvals for purchases have risen in recent months, hinting at a potential resurgence in buyers and prices.
Karen Noye, a mortgage expert at Quilter, cautioned buyers against timing the market’s bottom, urging early consideration and readiness for possible mortgage rate variations. Mark Harris, CEO of SPF Private Clients, believes that the steady house prices will encourage first-time buyers.
Nathan Emerson, CEO of Propertymark, expressed concerns about inflation rates and potential base rate hikes by the Bank of England, urging individuals to explore new mortgage options to navigate potential financial challenges. Amidst uncertainties, planning for increased expenditures becomes crucial for mortgage holders.
Halifax’s data on average house prices and annual changes underscore the evolving landscape of the UK property market.
