The quarterly rate of house price growth for the three months to April 2015 has declined for the first time this year, according to the latest Halifax House Price Index.
Prices for the period February-April 2015 were 2.2 per cent higher than in the previous three months. However, the rate of increase was lower than the quarterly rates recorded in January, February and March (2.6 per cent), making this the first dip for the year after three consecutive rises.
In an annual comparison, house prices in the three months to April 2015 were 8.5 per cent higher than in the same three months last year. While this is a slight increase on the 8.1 per cent recorded in March the annual rate remains within the narrow range of 8-9 per cent of the past seven months (except December’s drop to 7.8 per cent) and below the peak of 10.2 per cent in July 2014.
Housing economist Martin Ellis comments:
“Housing demand is being supported by a number of factors including economic improvement, rising employment and low mortgage rates. At the same time, supply remains very tight with a general shortage of properties available for sale. This combination has kept house price inflation steady in recent months…
“House prices are continuing to increase more quickly than average earnings despite the return to real earnings growth over the past few months. The resulting rise in the level of house prices in relation to earnings should constrain house price growth and activity over the remainder of the year. The annual rate of house price growth is forecast to end the year at 3-5 per cent.”
Home sales stagnate, while mortgage approvals rise
Home sales in the first quarter of 2015 remained unchanged from the last three months of 2014, according to the latest figures from the HMRC.
Compared to January-March period of last year, sales in the first quarter of 2015 were down 6 per cent.
Sales in March were also flat, at 101,000.
The latest Bank of England figures show that the number of mortgage approvals, which are an indicator of completed home sales, grew 2.8 per cent in January to March this year, compared to the fourth quarter of 2014.
In March, approvals saw a small drop after three months of consecutive rises.
