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House prices fall back in March after surprise February gain

daniellelevy
Written By:
daniellelevy
Posted:
Updated:
05/04/2019

House prices across the UK fell 1.6% in March, as Brexit uncertainty took its toll, according to the latest Halifax House Price Index.

The average house price in March was £233,181, according to the lender’s index, down 1.6% from an unexpected rise to £236,954 in February.

However, March’s figure was 2.6% higher compared to the same period last year – building on the 2.8% rise in February.

And on a quarterly basis the movement was somewhere in between, with prices up by 1.6% compared to the final three months of 2018.

Halifax managing director Russell Galley commented: “Industry-wide figures show that the number of mortgages being approved remains around 40% below pre-financial crisis levels, and we know that lower levels of activity can lead to bigger price movements,” he added.

Galley noted that the more stable measure of annual house price growth rose slightly to 2.6% and remained within the lender’s expectations for the year.

He added that challenges surrounding deposit-raising and a lack of available properties, combined with ongoing uncertainty around Brexit, means the lender expects to see subdued price growth for the time being.

Positive outlook

Mortgage Advice Bureau head of lending Brian Murphy agreed that the data highlighted the mercurial nature of month-on-month price movements.

“That said, the quarterly figure for the first three months of 2019 suggests a more resilient picture, which given the ongoing political turbulence is perhaps reassuring,” he said.

“There is, however, the distinct possibility that the lack of homes for sale in many parts of the UK is providing support for pricing. Also, let’s not forget that last March, we were all shivering in the grip of the Beast from the East with its concomitant impact on housing market activity.

“Therefore, while the annualised growth figure is encouraging at first glance, there’s a possibility that it doesn’t perhaps provide an accurate picture of market movements over the past twelve months, given the unusual circumstances of the same period last year.”