House prices fell slightly in March as the spring property market got off to a showery start with the North faring better than the South.
The latest Nationwide house price index showed a slight 0.2 per cent decline in the average property value last month but UK house prices up 1.6% compared with a year ago.
Northern Ireland best performing region, with prices up 4.6% while the South West weakest performing region, with prices down 1.7% over the year.
Robert Gardner, NationwideRobert Gardner, Nationwide’s Chief Economist, says: “UK house prices fell by 0.2% in March, after taking account of seasonal effects. Nevertheless, the annual rate of house price growth edged higher to 1.6% in March, from 1.2% in February.
“Activity has picked up from the weak levels prevailing towards the end of 2023 but remain relatively subdued by historic standards. For example, the number of mortgages approved for house purchase in January was around 15% below pre-pandemic levels.
“This largely reflects the impact of higher interest rates on affordability. While mortgage rates are below the peaks seen in mid-2023, they remain well above the lows prevailing in the wake of the pandemic (as shown in the chart below).
“With cost-of-living pressures easing as inflation moves back towards target, consumer sentiment is improving. Indeed, surveyors report a pickup in new buyer enquiries and new instructions to sell in recent months. Moreover, with income growth continuing to outpace house price growth by a healthy margin, housing affordability is improving, albeit gradually.
“If these trends are maintained, activity is likely to gain momentum, though the pace of the recovery is still likely to be heavily influenced by the trajectory of interest rates.
FEELING POSITIVE
Nathan Emerson, PropertymarkNathan Emerson, Chief Executive of Propertymark, says: “Sellers have every reason to start feeling positive about putting their home up for sale and being able to go on to buy their next perfect property. 2024 has shown a positive trend that house prices are growing once again following three years of economic turbulence.
“However the UK Government must look to make houses equally affordable for buyers and that can only be done by building more houses.
“Propertymark’s own Housing Insight Report found there has been an 80 per cent increase in the number of new properties becoming available, ultimately making it easier for people to consider a move.”
STRENGTH AND STABILITY
Amy Reynolds, head of sales at Richmond estate agency Antony Roberts, adds: “The persistent supply/demand imbalance, which is particularly evident across London, along with better mortgage rates since the turn of the year, are supporting overall market strength and stability.
“In line with what we are seeing on the ground, Nationwide’s latest house price index points to an upwards trajectory in property prices.
“The sales market continues to pick up some momentum with committed buyers and a strong pipeline of serious applicants boding well for the spring market.”
STABILITY
Ed Phillips, LomandLomond Chief Executive Ed Phillips adds: “Slowly but surely, the UK property market is responding to the overarching air of stability that has developed since interest rates have been held at 5.25%.
“While we’re yet to see any notable jump in property values just yet, market momentum is building, with a firm foundation now laid to facilitate further growth as we head into what is traditionally the busiest time of year.”
Marc von Grundherr, Benham and ReevesMarc von Grundherr, Director of Benham and Reeves, says: “As we approach the spring selling season a very marginal decline in the monthly rate of house price growth should be viewed as nothing more than the market pausing for breath before the floodgates open.
The real measure of market health is the annual rate of growth and a 1.6% jump demonstrates that we are very much heading in the right direction and it’s full steam ahead for the remainder of the year.”
Jason Harris-Cohen, Open Property GroupJason Harris-Cohen, Chief Executive of Open Property Group, says: “The market has continued to tiptoe forward in 2024 as buyers look to make their move.
“However, while the outlook is positive for the year ahead, sellers will need to remain patient. Not only will the higher cost of borrowing continue to prove problematic, but an uplift in market activity is also likely to increase fall through frequencies, while also delaying the time it’s taking to sell.”
And Verona Frankish, Chief Executive of Yopa, adds: “The appetite of the nation’s homebuyers may have been dampened by higher mortgage rates, but it certainly hasn’t disappeared, as demonstrated by the improvements seen in mortgaged approved house prices seen in recent months.
“With the seasonal spring surge in market activity also imminent, it’s only a matter of time before we see the UK property market shift up a gear with respect to both sales volumes and house price growth.”
Verona Frankish: Appetite of the nation’s homebuyers certainly hasn’t disappeared
