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The April HPI reveals that the average house price now stands at £288,949, up from £288,430 a month earlier.

The quarterly change is 0.8%, while prices are up 0.1% month-on-month.

Amanda Bryden, head of mortgages, Halifax, said: “UK house prices held steady in April, rising on a monthly basis by just +0.1% (less than £200 in cash terms). Annual growth rose to +1.1%, from +0.4% in March, though this can be attributed to the base effect of weaker price growth around this time last year.

“The average property now costs £288,949, compared to £287,244 at the start of the year. 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.

“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.

“Our recent research also found that buyers are adjusting their expectations, with first-time buyers in particular compensating for higher borrowing costs by targeting smaller properties. We see this reflected in property prices for the first few months of this year, with the value of flats rising most sharply, closing the ‘growth gap’ on bigger properties that’s existed for most of the last four years.

“However, we can’t overlook the fact that affordability constraints are still a significant challenge, for both new buyers and those rolling off fixed-term deals. Mortgage rates have edged up again in recent weeks, primarily as a result of expectations around future Bank of England base rate changes, with markets now pricing in a slower pace of cuts.

“If, as is still expected, downward moves in Bank Rate come into play later this year, fixed mortgage rates should fall. Combined with the resilience displayed by the housing market over recent months, we now expect property prices to rise modestly over the course of 2024.”

Industry reactions:

Jeremy Leaf, north London estate agent, commented: “We are not surprised to see house prices up a bit, then down a bit – a pattern which we are finding is repeated on the ground, reflecting that some sellers are more realistic than others.
 
“The market has lost a little momentum in the last month or so which has chimed with recent modest increases in mortgage rates as well as listings. However, underlying confidence remains fairly strong for now at least, allowing purchasers the opportunity to perhaps negotiate a little harder where possible.”

 

Matt Thompson, head of sales at Chestertons, said: “The uplift in market activity typically associated with spring was slightly delayed this year but became more evident over the course of April. Compared to March, we saw an increase in the number of London house hunters which also led to sellers feeling more confident about putting their property up for sale. Still, demand continued to outweigh supply in April which gave the majority of sellers the upper hand during price negotiations.”

 

Ed Phillips, CEO at Lomond, commented: “Property market conditions have improved notably so far this year and while we’ve seen early signs of positive house price growth, it’s important to note that the landscape remains a difficult one, with buyers still facing a tough task with respect to affordability.

With this in mind, it’s to be expected that the monthly rate of growth remains subdued, although the positive to take is that annually, property values are still climbing and the market has continued to stand firm.”

 

Tom Bill, head of UK residential research at Knight Frank, said: “House prices continue to move sideways as higher mortgage rates hit market momentum. As the prospect of the first rate cut since March 2020 drifts further into the distance, borrowing costs have edged higher and budgets have been squeezed. A short-lived burst of positivity in the early weeks of this year led to higher supply, increasing downwards pressure on prices. A wave of homeowners currently rolling off sub-2% mortgages is adding to the financial pressures in the system. As a summer rate cut moves onto the horizon, we expect UK house prices to respond and rise by 3% in 2024.”

 

Jason Tebb, president of OnTheMarket, noted:“While prices have picked up slightly after March’s dip, buyers remain sensitive as to what they are prepared to pay and perceive themselves to be in a good negotiating position.

“Activity continues to improve with more enquiries and stock coming to market, as the spring market really kicks into gear. New fixed mortgage rates have been creeping up on the back of higher Swap rates, with all eyes on the Bank of England to see whether it will reduce interest rates this week.

“Fluctuating property prices aren’t as important as transaction numbers. Demand is likely to pick up further once those rate cuts buyers have been waiting for actually materialise.”

 

Marc von Grundherr, director of Benham and Reeves, remarked: “The property market is arguably a little out of shape following a sustained period of subdued activity as a result of higher mortgage rates. And so while we’ve seen a string of positive house price reports in recent months, we’re yet to see the pace lift with respect to monthly growth.

But while the road ahead may be a challenging one, we remain in a far better place than we were this time last year and that sets a solid foundation for the market to now kick on and post a stronger performance in 2024.”

 

Jason Harris-Cohen, CEO of Open Property Group, commented: “Higher borrowing costs remain the key factor when it comes to current house price performance and while inflation may have eased, many buyers will have continued to struggle with their mortgage eligibility.

This is ultimately restricting the price they can pay and that is being reflected within a somewhat muted housing market performance. So while sellers should have a renewed degree of confidence given the uplift in market activity seen in recent months, it’s important to maintain a pragmatic approach to pricing if you do want to sell your home quickly.”

 

Verona Frankish, CEO of Yopa, added: “Yet further growth, both on a monthly and annual basis, should bring another boost to the market and strengthen the momentum that has been building so far this year.

Just last week, the Bank of England reported that mortgage approvals have climbed for their sixth consecutive month in a row and, while the market may still be finding its feet, it’s only a matter of time before this increase in buyer demand starts to drive a far stronger level of house price growth.”

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