UK house prices saw their biggest monthly drop in eight years when they fell 3.1% in April
Prospect of increasing interest rates may have held prospective buyers back
![Property experts warned 2018 will be 'uneventful' for the market](https://static.independent.co.uk/s3fs-public/thumbnails/image/2018/05/08/10/rtr3s0i0-1.jpg)
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Louise Thomas
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UK house prices fell 3.1 per cent in April, according to the Halifax house price index, hitting an average price of £220,962.
While prices went up on an annual basis, by 2.2 per cent, the drop between March and April, and a 0.1 per cent decline over the quarter, reflect “volatility in the short term”, Halifax said.
“Housing demand has softened in the early months of 2018, with both mortgage approvals and completed home sales edging down. Housing supply - as measured by the stock of homes for sale and new instructions - is also still very low,” said Halifax managing director Russell Galley.
“However, the UK labour market is performing strongly with unemployment continuing to fall and wage growth finally picking up. These factors should help to ease pressure on household finances and as a result we expect annual price growth will remain in our forecast range 0-3 per cent this year.”
Some property experts pointed out that early in April markets were still preparing for the Bank of England to raise interest rates, which would have made prospective home buyers wary, although a rate rise now looks more unlikely following a series of underwhelming data releases in recent weeks.
In addition, the extreme wintry weather that continued into March led to depressed sales over the quarter.
“With two Bank Holidays in May, it will be interesting to see if the sunshine tempts both buyers and sellers back into action this month, as an influx of new listings is very much required in many areas in order to stop the market stagnating further,” said Brian Murphy, head of lending for the Mortgage Advice Bureau.
Meanwhile, Sam Mitchell, CEO of online estate agents Housesimple.com, said the market is “listless and needs a spark, but it's hard to see where that spark will come from”.
"The economy is weak and consumers lack confidence but inflation is falling and an interest rate rise any time soon is now less likely,” he added.
"The market won't collapse because of the lack of stock and cheap money still available, but 2018 is shaping up to be fairly uneventful."
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