Halifax expects that a reduction in the Bank of England’s interest rate later in the year would contribute to a moderate increase in house prices
The average house price rose by 0.1% or less than £200 in cash terms to £288,949 last month, compared to £287,244 at the start of the year.
The latest Halifax house price index, published today, also indicated that average house prices have increased by 1.1% year-on-year.
However, the bank said the increase could be attributed to weaker price growth around this time last year.
In terms of regional house price changes, the North-west of England is experiencing the highest levels of growth, with prices rising by +3.3% annually to reach £231,599.
Northern Ireland remains the strongest performing nation or region in the UK, with house prices up by +3.4% on an annual basis in April, though this slowed from +4.1% in March. Properties in Northern Ireland now cost an average of £192,502.
>> See also: Annual house price growth slows to 0.3%, says Halifax
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In Wales, annual property price growth slowed to +1.1% in April, from +1.9% in March, with the average home now costing £218,775.
Meanwhile, Scottish house prices rose +1.5% year-on-year to £204,579.
Amanda Bryden, head of mortgages, Halifax, said: “While there is always much scrutiny of monthly price changes – and a degree of volatility is to be expected given current market conditions – the reality is that average house prices have largely plateaued in the early part of 2024”.
Bryden added: “This reflects a housing market finding its feet in an era of higher interest rates. While borrowing costs remain more expensive than a few years ago, homebuyers are gaining confidence from a period of relative stability. Activity and demand is improving, evidenced by greater numbers of mortgage applications so far this year, while at an industry level mortgage approvals have reached their highest point in 18 months.”
Furthermore, she pointed out that in the event of an interest rate cut by the Bank of England, fixed mortgage rates are likely to decrease. She also mentioned that with the recent stability of the housing market, this would result in a modest increase in house prices over the course of the year.
Karen Noye, mortgage expert at Quilter said: “All eyes will be on the Bank of England as it gears up to announce its latest monetary policy decision later this week. Though it is not expected to declare a shift in stance until later in the year, things are beginning to look a little more positive and we could see a turning point for the property market as we approach the summer months. An interest rate cut would present a more favourable borrowing market and would likely help reignite demand given many people are holding off in hopes of lower rates and reduced affordability pressures.”
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