Average houses prices rise by 1.5% in UK in March to new record high
The average price of a home in the UK reached £227,871 in March, a record high, having increased by 1.5% month on month, the latest index data shows.
Prices are now 2.7% higher than in March 2017, up from 1.8% annual growth recorded in February. It is the highest recorded price for the index published by lender the Halifax.
However, Russell Galley, Halifax managing director, pointed out that while mortgage are at their most affordable for years, activity levels, like house price growth, have softened compared with a year ago. Mortgage approvals are down compared to 12 months ago, whilst home sales have remained flat in the early months of the year.
‘This lack of direction in the housing market is in stark contrast to the continuing strength of the UK jobs market. The unemployment rate is now the joint lowest since 1975 and in the three months to January there were 402,000 more people in work compared to a year earlier,’ he said.
‘In the coming months we expect price growth to remain close to our prediction of 3% despite the very positive factors of continuing low mortgage rates, great affordability levels and a robust labour market. The continuing shortage of properties for sale will also support price growth,’ he added.
According to Russell Quirk, chief executive of hybrid estate agents Emoov, momentum is building in the housing market. ‘The current affordability of mortgages, coupled with a reduction in unemployment and an insufficient level of housing stock, will continue to stimulate the market and price growth should exceed wider predictions over the latter part of the year,’ he said.
Jonathan Hopper, managing director of Garrington Property Finders, pointed out that slowing consumer price rises mean wages will soon be growing again in real terms. ‘Few things stoke buyers’ confidence more than the sense that their pay packets are rising, and the Halifax’s research shows mortgages are now at their most affordable for a decade,’ he said.
‘Yet no one is predicting a sudden acceleration in demand. The crucial ingredient, buyer confidence in the future course of the market, remains in short supply. While we are seeing a steady stream of buyers, most remain unhurried and acutely price sensitive. Despite the shortage of homes for sale, most buyers won’t hesitate to walk away from a property they feel is overpriced,’ he explained.
‘Frustrating though it is, a meandering but stable market is what’s needed for a period. Unchecked house price inflation is neither desirable nor sustainable, so the current situation in which prices hold relatively firm is a useful one as it is supporting confidence levels and helping prevent a large correction,’ he added.