Between March and April the UK property market has dipped with house prices falling by 3.1% – the biggest fall seen since September 2010 – but economists predict a relatively flat market for the coming year.
UK house prices have risen year-on-year by 2.2% to April 2018, according to the latest house price index from Halifax, but this past month has seen values fall significantly by 3.1%, bringing average property prices in the UK to £220,962.
On a quarterly basis, property prices saw a slight decrease of 0.1%, with around £7,140 being knocked off the average home in March. Halifax also found that mortgage approvals as well as transactions had fallen, with the number of homes up for sale also edging down slightly, as the supply of housing in the country remains low.
Pressure on households will be eased this year
However, with employment levels remaining high across the UK as wage growth climbs, household finances are unlikely to be too stretched even with any upcoming mortgage interest rate rises. This should ease pressure on house prices and keep them within Halifax’s original forecast range of 0% to 3% over the course of 2018.
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Halifax also revealed the results of its Housing Market Confidence Tracker, which showed that although general optimism in the housing market is fairly low due to house price performance and activity levels, the majority of consumers still believe house prices will increase over the next few months.
There are also fewer people predicting property value falls now than there were six months ago, and less than a third of mortgage holders are worried about being able to meet their mortgage payments after potential Bank of England base rate rises.
It is expected that the Monetary Policy Committee will this week announce any changes in the base rate, with many predicting a rise, although Bank of England governor Mark Carney has hinted that this might not happen this month.