UK house prices fell for the second consecutive month in April, with Halifax halving its estimate for annual growth to 0.4% from 0.8%, as the conflict in the Middle East weighs on the housing market.
Halifax, part of Lloyds Banking Group, reported that the average UK home price dropped by 0.1% in April to £299,313, following a 0.5% decline in March. The lender attributed the slowdown to heightened uncertainty from global events, particularly rising energy prices that have pushed up inflation expectations and borrowing costs.
Amanda Bryden, head of mortgages at Halifax, said: 'After a strong start to the year, recent global developments have added a greater degree of uncertainty to the outlook. Higher energy prices have fed into inflation expectations, prompting markets to reassess the path for interest rates – a shift that has already pushed up borrowing costs for many buyers.'
Mortgage rates have risen sharply, with the average two-year fixed rate at 5.77% on Thursday, up from 4.83% at the start of March, according to Moneyfacts. The average five-year fixed rate stood at 5.69%, up from 4.95%.
Chris Hodgkinson, managing director of House Buyer Bureau, noted a growing disconnect between buyers and sellers: 'Sellers are still pricing based on expectation rather than current market reality. Buyers are far more price sensitive, and homes not positioned correctly from day one are sitting on the market longer, forcing larger reductions later.'
In contrast, Nationwide reported last week that house prices rose unexpectedly in April, with annual growth of 3%, up from 2.2% in March. The building society, which uses different measurement methods, has recorded four consecutive months of price increases.
