House prices fell in April as the market slowed following the rush to beat the stamp duty deadline.
According to the latest Halifax House Price Index, house prices fell by 0.8% in April, offsetting March’s 2.2% gain. This took the average price of a property down to £212,321.
The annual rate of house price growth dropped from 10.1% to 9.2% in April.
Martin Ellis, Halifax housing economist, said: “Current market conditions remain very tight as the severe imbalance between supply and demand persists. This situation, combined with low interest rates and rising employment and real earnings, should continue to push house prices up over the coming months.
”Weakening sentiment regarding house price prospects and a dip in consumer confidence, however, suggest that annual house price growth may ease.”
Andrew McPhillips, Yorkshire Building Society chief economist, said: “Now that the landlord rush has subsided, market activity is likely to be relatively choppy throughout the remainder of 2016. Uncertainty around the upcoming EU referendum is likely to reduce overseas investment, which may cause house price growth to fluctuate to some extent throughout the year.
“Although the EU vote is likely to cause a drop in demand for some properties, it is likely that there will still be more prospective buyers than there are houses. This means that house prices may continue to increase beyond inflation and wage-growth at least in the short-term, regardless of market uncertainty.”
Jeremy Leaf, a former RICS chairman and north London estate agent, said: “This easing of growth in prices is a trend that is likely to continue for the next few months at least until after the EU Referendum. As investors pause for breath, their withdrawal from the market is giving first-time buyers a better opportunity to take that first step on the ladder than they have had for some time.
“We don’t expect prices to fall unduly while the shortage of stock remains but we are more concerned with transaction levels so that buyers and sellers can come in and out of the market more freely. This is better for the longer term sustainability of the market.”
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