Halifax Reports Unexpected Boost in UK House Prices Outside of London

Halifax, the UK’s biggest mortgage lender, has reported that house prices have received an unexpected boost in the first quarter of 2018, but London prices have experienced a decline.

The high street lender confirmed a 2.7% rise compared to the same period last year, which also represents an increase on the 1.8% annual growth recorded in February. The average house price in March was £227,871.

The picture isn’t quite so rosy in the capital, however, with Halifax recording a sharp decline of 3.2% in prices compared with the previous quarter. The average price for a house in London is now £430,749.

Halifax’s research also reports that mortgages in the UK are at their most affordable level in a decade. A typical homeowner would be spending almost half of their disposable income on repayments, compared to 29% today.

Halifax also reports a drop in mortgage approvals by 7% compared to last year, including a 5% decrease in February, despite a rise in the opening month of the year. With continued stagnation in the property market, home sales in February reached 101,000, the same as in January, with sales for the three months to February marginally lower than the same period a year earlier, according to HMRC seasonally-adjusted figures.

This forecast could, however, be good news for potential buyers, especially with the UK job market in a strong state.

Russell Galley, Managing Director, Halifax, said: “House prices in the three months to March were largely unchanged compared with the previous quarter. The annual rate of growth continues to be in a narrow range of under 3%; though the average price of £227,871 is a new high.

“Activity levels, like house price growth, have softened compared with a year ago. Mortgage approvals are down compared to 12 months ago, whilst home sales have remained flat in the early months of the year. This lack of direction in the housing market is in stark contrast to the continuing strength of the UK jobs market. The unemployment rate is now the joint lowest since 1975 and in the three months to January there were 402,000 more people in work compared to a year earlier.

“In the coming months we expect price growth to remain close to our prediction of 3% despite the very positive factors of continuing low mortgage rates, great affordability levels and a robust labour market. The continuing shortage of properties for sale will also support price growth.”