Halifax issues £2,900 warning to people in UK who have mortgage to their name

Halifax has warned the average UK home has fallen £2,900 in price. Property prices grew by 0.3 per cent annually in March and prices are up two per cent on the previous quarter but the average house price fell by 1.0 per cent in March on a monthly basis, following a rise of 0.3 per cent in February.

The typical UK home now costs £288,430, around £2,900 less than last month. Northern Ireland remains strongest performing nation or region in the UK, the House Index from the banking giant – which was released today (Friday April 5) – revealed.

Kate Steere, property expert at personal finance comparison site finder.com, said: “Today’s figures show that the events from last year are still weighing heavily on prospective buyers’ minds. While lenders have cut mortgage rates and wage growth has outstripped inflation, the turmoil from the past 12 months is still casting a dark shadow on demand.

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“The Bank of England’s decision to hold rates has dampened UK house price recovery. Half of experts believe that the Bank will wait until June 2024 before cutting rates, so as a result we’re likely to see only a subdued recovery in house prices over the next couple of months.”

Nathan Emerson CEO at Propertymark commented: “Spring tends to be one of the busiest times of the year for the housing market, and with inflation falling and interest rates remaining static, homebuyers have adjusted to the latest market conditions. This should result in a surge of new buyers, sellers, and properties coming to the market as the year progresses.

“This was reflected in Propertymark’s latest Housing Insight Report, which found that there has been an 18 per cent increase in the number of new properties coming to the market. However if inflation continues to drop to pre-pandemic levels, Propertymark is hopeful that interest rates will also start to fall, and the whirlwind of economic turbulence will finally settle for everyone once again.”

Kim Kinnaird, director of Halifax Mortgages, said: “Compared to last month, the price of a UK property fell 1.0% or £2,908 in cash terms, with the average property now costing £288,430. That a monthly fall should occur following five consecutive months of growth is not entirely unexpected, particularly in view of the reset the market has been going through since interest rates began to rise sharply in 2022.

“Despite this, house prices have shown surprising resilience in the face of significantly higher borrowing costs. Affordability constraints continue to be a challenge for prospective buyers while existing homeowners on cheaper fixed-term deals are yet to feel the full effect of higher interest rates.

“This means the housing market is still to fully adjust, with sellers likely to be pricing their properties accordingly.” She continued: “Taking a slightly longer-term view, prices haven’t changed much over the past couple of years, moving in a narrow range since the spring of 2022, and are still almost £50,000 above pre-pandemic levels.

“Looking ahead, that trend is likely to continue. Underlying demand is positive, as greater numbers of people buy homes, demonstrated by recent rises in mortgage approvals across the industry and underpinned by a strong labour market.”