House price change on this measure has now been steady in the range 1.8% - 2.3% for the past eleven months.
Prices in the three months to April were 8.5% higher than in the same three months a year earlier. This was marginally lower than in March (8.7%).
House prices fell marginally by -0.2% in April. This was the second successive monthly price fall and the third in the past six months. Monthly movements, however, can be volatile and the quarter on quarter change is a more reliable indicator of the underlying trend.
Both home sales and mortgage approvals have reduced in volumes. Home sales decreased by 5% for the first time in ten months in March to 106,070; but still remain 29% higher than in March 2013. In March mortgage approvals for house purchases – a leading indicator of completed house sales – fell for the second month in succession to 67,135. Approvals are 12% below their recent peak in January and at the same level as seen in September last year.
The difference between housing demand and supply of properties coming on to the market continues to grow. New buyer enquiries have remained steady so far in the first three months of 2014, but still significantly lower than in the second half of last year. However, the number of homeowners providing instructions to put their property on the market for sale declined for the third consecutive month.
Commenting, Stephen Noakes, Mortgages Director, said:
"House prices in the three months to April were 2.3% higher than in the three months to January. Annually prices were 8.5% higher in the three months to April than in the same three months last year. However, prices fell marginally during the month representing a second successive monthly decline.
"Although mortgage approvals have now declined for two consecutive months and property transactions fell in March, on an annual basis housing demand still remains strong. Housing demand continues to be supported by an economic recovery that is gathering pace, rising consumer confidence, low interest rates and wage growth finally beginning to outgrow consumer prices. However, with supply of properties being slow to respond to market conditions, stronger demand in the past year has resulted in upward pressure on house prices."
Jeremy Duncombe, Director, Legal & General, comments on the Halifax House Price Index:
“Across the UK, confidence is returning to the housing market. House prices are increasing which is encouraging more and more people to move home. Although the housing market is seen as one of the key indicators for the overall health of the UK economy, and homeowners will be pleased to see the value of their property increase, growth which outstrips inflation is not a good thing. As wages fail to keep pace with house prices, especially in the South East of the country, more people are priced out of the housing market. Building more homes as well as having greater flexibility in mortgage products would allow more people to get on to the ladder and keep house price inflation to a more manageable level.”
Nicholas Ayre, managing director of buying agency Home Fusion, says:
"With prices levelling out and even tailing off a little in the past month, we could be seeing the first signs of resistance from buyers who are not prepared to pay what sellers are asking. If buyers are being sensible and refusing to pay over the odds because they can't afford it, then that is a good thing. While interest rates are low at the moment, they won't always be and working out whether you can afford your mortgage when rates do rise is a reasonable strategy.
"'However, this may just be a blip rather than the beginning of a downwards trend in prices. Prices still rose on the quarter and on the year. And while the market may be adjusting, there are pockets of the London housing market where it is still crazy busy while in other parts of the country talk of a bubble is laughable. A national average house price is not at all helpful, as regional variations tend to be significant.
"The mortgage market review is unlikely to be the reason for the slowdown as it has only recently been introduced. What we are seeing is a housing market that is jammed with homeowners refusing to sell up because they are worried about where they are going to live. Not only are transactional costs high - as well as the sticker price, you have stamp duty, various legal costs and stamp duty - there is also the stress and hassle factor. No wonder people are staying put."
