House price growth has slowed down by half due to the impact of the Middle East conflict on mortgage costs, according to the latest report from the Halifax. In April, national house prices increased by an average of 0.4% year-on-year, a decrease from the 0.8% growth seen in March.
Amanda Bryden, the head of mortgages at Halifax, attributed the deceleration in house price growth to recent global events causing uncertainty in the market. Rising energy prices have led to inflation expectations, prompting a reevaluation of interest rate trajectories, subsequently increasing borrowing costs for many homebuyers. This shift has resulted in more cautious spending among households, with a focus on managing living expenses and reconsidering property plans.
The Halifax noted that the slowdown in house price growth could offer opportunities for first-time buyers, as the average price paid by this group reached its lowest levels this year. In April, the average UK house price fell by 0.1% compared to the previous month, bringing the average property value to £299,313.
Across the UK, Northern Ireland leads in annual house price growth with a 7.6% increase, followed by Scotland with a 4.0% rise. Conversely, Wales experienced a slower growth rate of 0.7% annually. In England, the report highlighted stronger price growth in northern regions, particularly in the North East and North West, where house prices rose by 4.5% and 3.4% respectively over the year.
Industry experts shared insights on the current housing market dynamics. Sarah Coles from AJ Bell cautioned against delaying purchases in hopes of further price drops, emphasizing the unpredictability of market movements. Mortgage expert Karen Noye advised buyers and homeowners to monitor mortgage rates closely and act promptly on favorable pricing changes. Mark Harris of SPF Private Clients mentioned that steady house prices could benefit first-time buyers.
Propertymark’s Nathan Emerson raised concerns about inflation and potential base rate increases by the Bank of England in the coming months, suggesting that individuals with mortgage products should explore new options to manage potential financial impacts. As summer approaches, he advised proactive planning to navigate through any increased costs effectively.
According to Halifax, here are the average house prices and annual changes reported.