HOUSE prices are down 0.1% in April as the Iran war adds a “greater degree of uncertainty” to the property market.
Halifax’s House Price Index said house prices edged down 0.1% in April, following a 0.5% fall in March, and annual growth also slowed to 0.4%, from 0.8% in March.
The average property price is now £299,313, compared with £299,609 in March.
House prices continue to vary significantly by region and nation, with stronger growth in the North and more subdued conditions in the South.
Northern Ireland still leads UK annual house price growth, with average prices up 7.6% over the past year to £224,851. Scotland also recorded strong growth, rising 4.0% annually to an average price of £222,448.
Wales has seen property price growth continue to slow, now 0.7% on an annual basis, taking the typical home value to £230,952.
In England, stronger price growth remains concentrated in northern regions. The North East saw prices rise 4.5% over the year to £183,445, while the North West recorded annual growth of 3.4%, with the average home now costing £248,945.
By contrast, the southern markets continue to see prices fall. The South East led declines, with prices down 2.0% year‑on‑year to £383,044, while London saw average values fall by 1.4% to £536,051.
This comes over two months after the start of the Iran war, which shows no sign of ending anytime soon. Experts said it has led to house buyers being more cautious amid fears of inflation and the cost-of-living, including higher petrol prices, going up.
Challenging two months for the property market
Amanda Bryden, Head of Mortgages, Halifax, said: “After a strong start to the year, recent global developments have added a greater degree of uncertainty to the outlook. In particular, 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.
“This understandably leads to more caution among some households, with the cost-of-living once again front of mind and extra thought being given to planned property moves.
“Even so, the housing market continues to display the resilience that has been its hallmark in recent years. While activity is likely to cool in the near term, the underlying picture remains one of relative stability, supported by wage growth that continues to outpace house price inflation.
“Another important factor is that the majority of existing homeowners are on fixed-rate mortgages, meaning they are largely insulated from short term changes in interest rates.
“A slower pace of house price growth may be disappointing news for existing homeowners. However, for those looking to step onto the property ladder, stable prices are helpful, even if higher mortgage rates mean affordability remains stretched. The average price paid by first-time buyers has fallen slightly to £238,908, its lowest level so far this year.”
It shows the resilience of the property market
Babek Ismayil, CEO at homebuying platform OneDome, said the figures show how resilient the property market remains.
He added: “Given events in the Middle East and their impact on mortgage rates, consumer confidence and inflation more widely, a slight dip in price growth last month and on an annual basis shows the property market’s resilience.
“While existing homeowners will, of course, be underwhelmed, conditions for first-time buyers are very favourable at present, as they can negotiate hard on price.”
Emma Jones, Managing Director at Runcorn-based Whenthebanksaysno.co.uk, said the war in Iran has hit the property market.
She added: “House prices staying relatively stable in the context of ongoing events in the Middle East shows the resilience of the property market. There’s a lot of activity among first-time buyers, who sense they are holding all the cards and are in a strong bargaining position.
“As it often does, the property market, for now at least, is holding up and weathering the geopolitical storm fairly well. What happens to mortgage rates will be key to demand and sentiment in the months ahead.”
Katy Eatenton, Mortgage & Protection Specialist at St Albans-based Lifetime Wealth Management, said mortgage rates have been improving slightly in recent weeks.
She added: “It’s been a challenging two months for the property market and the sharp increase in mortgage rates hit confidence for six.
“However, rates have been edging down slightly in recent weeks and Santander also announced it was reducing selected mortgage rates yesterday. If mortgage rates continue to fall, confidence will start to return.”
