House price growth has slowed down by half due to the impact of the Middle East conflict on mortgage rates, according to the latest report from Halifax. In April, national house prices saw a mere 0.4% year-on-year increase, compared to the 0.8% rise in March.
Amanda Bryden, the head of mortgages at Halifax, attributed this deceleration to recent global uncertainties, especially the surge in energy prices leading to inflation expectations. This has prompted a reevaluation of interest rate trajectories, resulting in increased borrowing costs for many potential homebuyers.
Despite the cautious sentiment among households due to rising living costs, there are opportunities emerging for first-time buyers as the average property prices for this group are at their lowest levels this year. Overall, the average UK house price dropped by 0.1% month-on-month in April, bringing the average property value to £299,313.
Regional variations in house price growth were noted, with Northern Ireland leading the annual growth at 7.6%, followed by Scotland with a 4.0% increase. However, growth in Wales slowed down to 0.7%. In England, the report highlighted that the strongest price growth is concentrated in the northern regions, particularly the North East with a 4.5% increase and the North West with a 3.4% rise.
Industry experts, including Sarah Coles from AJ Bell and Karen Noye from Quilter, advised potential buyers not to wait for further price drops, emphasizing that market movements are unpredictable. They recommended reviewing mortgage options early and being prepared to act promptly as pricing could fluctuate rapidly.
Mark Harris of SPF Private Clients pointed out that the stable house prices could be encouraging for first-time buyers. Nathan Emerson of Propertymark raised concerns about potential inflation and speculated base rate increases by the Bank of England, advising individuals with tracker mortgages or expiring deals to explore new mortgage products to manage potential financial challenges.
Halifax provided an overview of average house prices and their annual changes, underscoring the current trends in the housing market.