The latest house price index (HPI) from the Halifax reports that house prices in the three months to April were 8.5 percent higher than the same period last year.
House prices were also up 2.3 percent in the three months to April compared to the three months to January. The average house price is now £177,648 according to the halifax.
However, on a monthly basis prices fell by 0.2 percent in April following another small fall in March. This is in stark contrast to those reported by the Nationwide building society (see graph below) but does reflect the latest data from the Land Registry.
The Halifax says that there has been a reduction in both home sales and mortgage approvals with sales decreasing by 5 percent in March – the first fall in ten months – and mortgage approvals (a leading indicator of completed house sales)12 percent below a recent high in January.
Commenting, Stephen Noakes, Mortgages Director for Halifax, 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."
Martin Beck, senior economic adviser to the EY ITEM Club said:
"Today's Halifax numbers for April reported the second consecutive monthly fall in house prices. This caused the annual rate on the Halifax measure to slow modestly to 8.5%. That said, we do not think this slowdown will necessarily be long-lasting. April's latest survey from the Royal Institute of Chartered Surveyors pointed to a fall in the supply of homes for sale, with new sales instructions dropping for the fourth month in a row. Despite the new buyer enquiry balance in the same survey also easing in April, it remained positive, with the gap between the number of buyers and sellers unchanged.
"So growing demand and falling supply points to house prices continuing to rise at a strong rate. This is consistent with what surveyors are expecting – a net balance of 48% of surveyors expect prices to rise over the next three months. But, price expectations in London appear to be moderating – the balance of 49% was the lowest in almost a year."