Average UK house price rose to a record high in first quarter of 2018

The bank said UK mortgages are the most affordable they have been in a decade

Caitlin Morrison
Monday 09 April 2018 08:59
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London house prices falling at fastest pace since recession, new data reveals

House prices across the UK rose 2.7 per cent in the first three months of 2018, compared with the same period of last year, according to the Halifax house price index.

The average price hit £227,871 in March, the highest on record. However, prices for the quarter were 0.1 per cent lower compared with the previous three months.

Meanwhile, Halifax said mortgages in the UK are “at their most affordable level in a decade”, with activity in the housing market slower than this time last year.

The bank said there were “no signs that the acute shortage of stock of homes available for sale is easing”.

Home sales in February stood at 101,000, the same as in January. Mortgage approvals dropped by 5 per cent between the first and second months of the year, according to Bank of England data.

“Mortgage approvals are down compared with 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,” said Russell Galley, managing director at Halifax.

“In the coming months we expect price growth to remain close to our prediction of 3 per cent 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.”

However, Samuel Tombs, the chief UK economist at Pantheon Macroeconomics, warned that the index should not be taken as a strong sign that prices will continue to rise.

“The jump in Halifax’s measure of house prices in March just looks like volatility, rather than the start of a strong upward trend,” he said. “With mortgage rates now on a rising path, given that wholesale funding costs have increased since the start of the year... house prices will struggle to increase over the coming months.”

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