UK house prices dipped a little in March, with the average property price now seen at £299,677. That also sees the annual house price growth slow to 0.8%, down from 1.2% in February. That shows the market has long some bounce going into the spring season but perhaps relative economic uncertainty from the events in the Middle East is also weighing.
Halifax notes that:
“Concerns about higher energy prices have pushed up inflation
expectations, which in turn led to a rise in mortgage rates, reducing confidence that interest
rates will be cut this year and dampening the initial momentum in the market seen at the start
of the year.”
Adding that:
“The effect on house prices will largely depend on how long‑lasting these pressures prove to
be and the wider implications for the economy and unemployment. Mortgage rates are a key
factor for buyers, particularly those getting on the ladder for the first time, who are already
balancing the challenge of saving a deposit, with the cost of borrowing. As a result, many are
likely to watch movements in mortgage rates closely, before making a decision on any home
purchase. In this environment, professional advice can play an important role in helping
people understand their options and make informed decisions that are right for their individual
circumstances.
However, the recent increase in UK mortgage rates has been more modest than the sharp
rises seen during the mini budget of 2022. Further, many households will already be on fixed
deals, protecting them from the latest rate rises. Taking all this into account, house prices
may prove resilient, even if uncertainty weighs on market activity in the near term.”
