UK property market stable as prices rise again in March, says Halifax – Business Direct | Business

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House prices across the UK rose for the third month in a row in March, while the annual rate slowed to the lowest in three and a half years.

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This suggests that the market is stable, although a further slowdown throughout this year looks likely as mortgage costs have risen, said Halifax, which is part of Lloyds Banking Group.

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A typical UK property now costs £287,880 (compared to £285,660 in February), according to the monthly house price index from Halifax.

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Prices rose 0.8% in March from the month before following February’s 1.2% gain, and were up 1.6% on a year earlier, the slowest annual pace since October 2019.

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House prices rose in all UK nations and regions last month, though the annual rate of growth continued to slow in most areas. Mortgage costs have risen as the Bank of England has raised interest rates 11 times to 4.25% to fight double-digit inflation (at 10.4% in February).

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Kim Kinnaird, director of Halifax Mortgages, said:

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The UK housing market continues to show resilience following the sharp downturn at the end of 2022, with average property prices rising again in March.

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Predicting exactly where house prices go next is more difficult. While the increased cost of living continues to put significant pressure on personal finances, the likely drop in energy prices – and inflation more generally – in the coming months should offer a little more headroom in household budgets.

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While the path for interest rates is uncertain, mortgage costs are unlikely to get significantly cheaper in the short-term and the performance of the housing market will continue to reflect these new norms of higher borrowing costs and lower demand. Therefore, we still expect to see a continued slowdown through this year.

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The Halifax data has painted a more stable picture, while Nationwide Building Society’s house price index showed an 0.8% monthly drop in house prices, and an annual decline of 3.1%, the fastest since the aftermath of the financial crisis in 2009.

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But other indicators, such as the Bank of England’s mortgage approvals data and property website Rightmove’s measure of asking prices have pointed to more stability in the housing market, after the Liz Truss government’s unfunded mini-budget caused chaos in the autumn.

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UK housing market analyst Neal Hudson tweeted:

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Halifax report house prices rose 0.8% in March. Annual change of 1.6%. pic.twitter.com/Xk7oGT85Wo

— Neal Hudson (@resi_analyst) April 6, 2023

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Matthew Thompson, head of sales at the estate agents Chestertons, said:

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House hunters may not be seeing the drop in London property prices that they had hoped for. In March, the average price at which properties sold via our branches stood at £1.37m with neighbourhoods such as Putney, Fulham and Barnes being in particularly high demand with buyers.

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Since the start of this year, many homeowners put their sale on hold to observe the market which has led to demand further exceeding the number of properties available for sale. This is resulting in properties keeping their value with little room for price negotiation. Throughout March, the majority of London sellers have therefore been able to secure their asking price or even receive higher offers from buyers.

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The Agenda

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• 8.30am BST: Eurozone S&P Global Construction PMI for March

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• 9.30am BST: UK S&P Global/CIPS Construction PMI for March (forecast: 53.5)

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• 1.30pm BST: US Initial jobless claims for week of 1 April (forecast: 200,000)

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Key events

TomBillHead of UK Residential Research at Knight Frank Property Group, said:

Activity has been strong but unspectacular in the UK property market this year as the mini-budget hangover slowly fades. Prices are holding up overall, but will be tested this spring as supply rises and higher mortgage rates cause a sharp breather from a growing number of buyers and homeowners.

We expect prices to decline a few percent this year as the transition to the new normal in borrowing costs takes place.

Intro: UK housing market steady as prices rise again in March

Hello and welcome to our ongoing coverage of business, financial markets and the global economy.

House prices across the UK rose for the third consecutive month in March, while the annual rate slowed to its lowest level in three and a half years.

That suggests the market is stable, although a further slowdown throughout this year looks likely as mortgage costs have risen, said Halifax, which is part of Lloyds Banking Group.

A typical property in the UK now costs £287,880 (down from £285,660 in February), according to the monthly Halifax House Price Index.

Prices rose 0.8% in March from the previous month after February’s 1.2% gain and rose 1.6% from a year earlier, the slowest annual pace since October 2019.

House prices rose in all countries and regions of the UK last month, although the annual rate of growth continued to slow in most regions. Mortgage costs rose as the Bank of England raised interest rates 11 times to 4.25% to fight double-digit inflation (to 10.4% in February).

Kim Kinnairddirector of Halifax Mortgages, said:

The UK property market continues to show resilience after the sharp decline at the end of 2022, with average house prices rising again in March.

Predicting exactly where home prices will go next is more difficult. As the rising cost of living continues to put significant pressure on personal finances, the likely decline in energy prices – and inflation more generally – in the coming months should offer some more room for maneuver in the household budget.

Although the path of interest rates is uncertain, mortgage costs are unlikely to become significantly cheaper in the near term and housing market performance will continue to reflect these new norms of higher borrowing costs and demand. weaker. Therefore, we still expect to see a continued slowdown throughout this year.

Data from Halifax painted a more stable picture, while the Nationwide Building Society house price index showed a 0.8% monthly drop in house prices and a 3.1% annual drop, fastest since the aftermath of the 2009 financial crisis.

But other indicators, such as data on mortgage approvals from the Bank of England and a measure of asking prices by property website Rightmove, pointed to greater stability in the housing market, after the Liz Truss the government’s unfunded mini-budget caused chaos in the fall.

UK housing market analyst Neal Hudson tweeted:

Halifax report house prices rose 0.8% in March. Annual change of 1.6%. pic.twitter.com/Xk7oGT85Wo

— Neal Hudson (@resi_analyst) April 6, 2023

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Matthew Thompsonsales manager at real estate agencies Chestertonssaid:

House hunters may not be seeing the drop in London property prices they were hoping for. In March, the average price at which properties sold through our branches was £1.37million, with areas such as Putney, Fulham and Barnes in particular demand from buyers.

Since the beginning of this year, many owners have suspended their sales to observe the market, which has led to demand still exceeding the number of properties available for sale. This results in properties retaining their value with little room for price negotiation. Throughout March, the majority of London sellers were therefore able to secure their asking price or even receive higher offers from buyers.

Agenda

• 8:30 a.m. BST: Global S&P eurozone construction PMI for March

• 09:30 BST: UK S&P Global/CIPS Construction PMI for March (forecast: 53.5)

• 1:30 p.m. BST: US initial jobless claims for the week of April 1 (forecast: 200,000)