Dip in house price growth “caused by weak consumer confidence”, says Halifax – but others think it could be the Brexit effect
UK house price growth actually dipped last month, with economists blaming weakening consumer sentiment for a slowing in annual increases.
According to the Halifax House Price Index, average house prices fell 0.8 per cent in April to £212.321.
This meant the annual change had slowed from 10.1 per cent recorded in the year to March to 9.2 per cent. In the three months to the end of April, prices rose 1.5 per cent – almost half the 2.9 per cent rate in the three months to March.
Martin Ellis, Halifax housing economist, said: "Current market conditions remain very tight as the severe imbalance between supply and demand persists. This situation, combined with low interest rates and rising employment and real earnings, should continue to push house prices up over the coming months.
"Weakening sentiment regarding house price prospects and a dip in consumer confidence, however, suggest that annual house price growth may ease."
Howard Archer, chief UK economist at IHG, said despite these figures he expected housing market activity to "regain limited momentum in the second half of 2016 on the assumption that a vote to stay in the EU reduces uncertainty and supports a pick-up in economic activity".
"High employment, decent purchasing power and low interest rates should underpin house buyer interest once the referendum fog has disappeared," he added. "A shortage of properties will also likely provide support to house prices."
Jeremy Leaf, a former RICS chairman and north London estate agent, added: "This easing of growth in prices is a trend that is likely to continue for the next few months at least until after the EU referendum. As investors pause for breath, their withdrawal from the market is giving first-time buyers a better opportunity to take that first step on the ladder than they have had for some time.
"We don’t expect prices to fall unduly while the shortage of stock remains but we are more concerned with transaction levels so that buyers and sellers can come in and out of the market more freely. This is better for the longer term sustainability of the market."