House costs at a standstill having hardly budged in 4 years – what occurs subsequent to property values?
House prices remain almost at a standstill, according to latest figures from Halifax.
The average property price is now £299,313, compared to £297,781 this time last year, a 0.4 per cent annual increase.
It means the typical home is worth little more than four years ago. In summer 2022, the average property value remained just shy of £294,000.
In percentage terms, it means home values have risen less than 2 per cent in almost four years.
In recent months, prices have actually been falling, according to the mortgage lender, with the typical home edging down 0.1 per cent in April, following a 0.5 per cent fall in March.
The conflict in the Middle East has added a ‘greater degree of uncertainty’ and resulted in higher mortgage rates, according to Amanda Bryden, head of mortgages, Halifax.
Stagnant: Average property prices are little different from what they were four years ago
Fixed mortgage rates are currently around a percentage point higher than they were at the start of the conflict.
‘Higher energy prices have fed into inflation expectations, prompting markets to reassess the path for interest rates – a shift that has already pushed up borrowing costs for many buyers,’ says Bryden.
‘This understandably leads to more caution among some households, with the cost-of-living once again front of mind and extra thought being given to planned property moves.’
Tom Bill, head of UK residential research at Knight Frank, thinks house prices are likely to fall further over the coming months.
He says: ‘The recent spike in mortgage rates will only put gradual downwards pressure on house prices as more favourable offers that pre-date the Middle East conflict take several months to lapse.
‘It means some buyers are keen to complete while others have seen their spending power reduced.
‘We expect house prices to begin falling in coming months but modest growth to return by the end of the year.’
While the average price is virtually flat, when factoring in the entire country, home values continue to vary significantly by region and nation, with stronger growth in the North and more subdued conditions in the South.
In Northern Ireland average prices are up 7.6 per cent over the past year to £224,851, while in Scotland prices are up 4 per cent annually to an average price of £222,448.
In England, stronger price growth remains concentrated in northern regions.
The North East saw prices rise 4.5 per cent over the year to £183,445, while the North West recorded annual growth of 3.4 per cent, with the average home now costing £248,945.
By contrast, the southern markets continue to see prices fall.
In the South East prices are down 2 per cent year‑on‑year to £383,044, while London saw average values fall by 1.4 per cent to £536,051.
Buying agent, Jonathan Hopper of Garrington Property Finders says it’s very much a buyers’ market in much of the south.
‘National averages tell us little about what’s happening in the widely diverging regional markets,’ he says.
‘In London and the South East, Halifax’s data shows that average prices in the commuter belt and the capital have fallen.
‘In large part this is due to supply and demand fundamentals.
‘Supply is at an all-time high after the Easter weekend saw the traditional surge in new listings, and demand is thin.
‘In some areas there are too few serious buyers chasing too many homes for sale.
‘This mismatch is allowing buyers to call the shots on both tempo and price. In response, some are demanding – and getting – significant price reductions; while those who are not convinced that a home is 100 per cent right for them won’t hesitate to walk away.
‘This is creating some fantastic opportunities for committed buyers, and Halifax calculates that the average price paid by first-time buyers across the UK has fallen to its lowest level so far this year.’
