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The latest House Price Index from Halifax has revealed that prices fell by 3.1% in April compared to March, as well as by 0.1% on a quarterly basis. According to managing director Russell Galley, this is due to softened housing demand, "with both mortgage approvals and completed home sales edging down."
Despite this recent lull in activity, house prices were still up 2.2% year-on-year, with the average price across the UK sitting at £220,962. However, house prices grew by 2.7% annually in March and recorded the lowest average seen since July 2017, so even the long-term indicators are pointing towards decreased activity.
"Housing supply – as measured by the stock of homes for sale and new instructions – is also still very low," pointed out Russell. At the same time, confidence in the housing market remains at a five-year low, in line with the subdued activity seen so far this year.
"However, the UK labour market is performing strongly, with unemployment continuing to fall and wage growth finally picking up," concluded Russell. "These factors should help to ease pressure on household finances and as a result we expect annual price growth will remain in our forecast range of 0-3% this year."
One consequence of all this variable movement in the mortgage market is that it is looking less and less likely that the Bank of England will increase base rate tomorrow, with most economists now predicting that base rate will stay put at 0.50% until at least September. Even if it does go up, Halifax's recent survey shows that less than a third of mortgage holders are worried about rising interest rates affecting their ability to make their monthly repayments.
Whether or not base rate goes up tomorrow, it's always a good idea to make sure you're on the best possible mortgage deal, so that even if house prices fall you don't risk going into negative equity. Why not have a look at the mortgage charts to see if there's a better product out there for you?
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