According to the Halifax house price index, the fall follows a 0.8% increase in March, and means that the annual rate of house price growth has slowed from 1.6% to 0.1%. As a result, the average property is now worth £286,896.

Growing regional variations

Halifax suggested there was an “increasingly mixed picture” for house prices across the different regions of the UK.

For example, the four regions of southern England have seen average house prices fall over the last 12 months, with the biggest dip taking place in the South East, where prices have fallen 0.6%.

The lender noted that these regions tend to have the most expensive average purchase price, meaning that buyers here have seen the biggest impact from higher borrowing costs.

All other regions of the UK saw positive annual price growth in the 12 months to April, most notably in the West Midlands where prices rose 3.1%. 

A mixed reponse

Kim Kinnaird, director of Halifax Mortgages, noted that April’s fall came after three straight months of price rises, with the typical house price now around £28,000 higher in cash terms than two years ago.

She added: “Mortgage rates are now stabilising, and though they remain well above the average of recent years, this gives important certainty to would-be buyers. While the housing market as a whole remains subdued, the number of properties for sale is also slowly increasing, as sellers adapt to market conditions.”

Kinnaird warned that cost-of-living concerns remain significant, and may act as a brake on activity. 

“Combined with the impact of higher interest rates gradually feeding through to those re-mortgaging their current fixed-rate deals, we should expect some further downward pressure on house prices over the course of this year,” she concluded. 

Meanwhile, Sarah Coles, head of personal finance at Hargreaves Lansdown noted that the figures told a different story from some of the more optimistic reports that had emerged in past few weeks.

She said: “The Halifax figures pour cold water on the growing fires of optimism that had been lit across the property market in recent weeks. After clinging onto dwindling annual growth for a few months, the figures are now at a tipping point.

“The spring has produced a wave of positive announcements – from mortgage approvals rising for a second consecutive month, to Nationwide’s 0.5% bump in April, and Zoopla’s claim that demand has hit a high for 2023.”

However, she was more optimistic on the mortgage market and its effect on housing demand.

She said: “Mortgage rates have also fallen significantly from the peak in October last year, which has made a major impact on people’s ability to buy, and how they feel about the affordability of property.”

Rosier picture

However, Carl Howard, group CEO at Andrews Estate Agents, was more upbeat, saying that there is currently a “much rosier picture” for the housing market than last Autumn.

He suggested that fears of a sustained slump have been dispelled, with the signs that the spring will be “increasingly busy”.

Howard continued: “Sellers are also willing to be flexible with house prices, which is generating more activity and pushing more sales over the line.”