Modest Uptick in British House Prices Amid High Interest Rates
In a slight rebound from March’s figures, British house prices in April saw a marginal increase of 0.1 percent, positioning them at a 1.1 percent rise compared to the previous year. This data, released by mortgage lender Halifax, indicates a modest recovery in the housing market, despite the ongoing scenario of elevated interest rates.
The latest figures suggest a stabilization of house prices following a 0.9 percent decrease in March, which marked the first drop since September. This contrasts with the unexpected 0.4 percent decline reported by Nationwide, another mortgage lender, last week. According to Amanda Bryden, Halifax’s head of mortgages, the average house prices have largely leveled off in the early months of 2024.
With the Bank of England’s interest rates holding steady at a 16-year peak of 5.25 percent, economists anticipate no change in the immediate May rate decision. Meanwhile, financial markets are not expecting any rate reductions until at least August. Interestingly, BoE mortgage approvals surged to an 18-month high in March, showing a robust 20 percent year-on-year increase as the market bounced back from the turbulence caused by former Prime Minister Liz Truss’ budget proposals in late 2022.
Bryden noted that first-time buyers are adapting to higher borrowing costs by opting for smaller properties, though affordability remains a significant hurdle. The housing market experienced a 25 percent price surge from February 2020 to September 2022, mirroring trends in other Western countries during the pandemic. As of February, prices were still 3 percent shy of their peak, based on official statistics.
Halifax reported that the average UK house price in April stood at 288,949 pounds ($362,284), with the fastest annual price increases occurring in Northern Ireland and the most significant declines in eastern England. London’s housing prices showed little variation over the past year.
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