UK house prices fell for a second consecutive month in April, with annual growth halving as the Middle East conflict created uncertainty in the housing market. Halifax, part of Lloyds Banking Group, reported that the average home price dropped by 0.1% in April to £299,313, following a 0.5% decline in March. The annual rate of growth slowed to 0.4% from 0.8%.
Amanda Bryden, head of mortgages at Halifax, attributed the slowdown to global developments, particularly higher energy prices feeding into inflation expectations. This has prompted markets to reassess interest rate paths, pushing up borrowing costs. The average two-year fixed mortgage rate rose to 5.77% from 4.83% at the start of March, while the five-year rate increased to 5.69% from 4.95%, according to Moneyfacts.
Before the conflict, the market showed solid growth, with prices rising 0.8% month-on-month in January and 0.3% in February. Halifax had forecast 1.2% annual growth in February. However, the economic turbulence has created a disconnect between buyers and sellers, with many sellers pricing based on outdated expectations.
Chris Hodgkinson of House Buyer Bureau noted that buyers are more price-sensitive, leading to longer selling times and larger reductions. In contrast, Nationwide reported a surprise 3% annual price increase in April, its fastest in 11 months, though its data measures activity differently. The conflicting reports highlight the market's uncertainty amid geopolitical tensions.
