Over the last year, according to the Halifax House Price Index (HPI), property values in the UK have risen by 1.1% – compared to an annual uplift of 0.4% last month.
It means the average price of a house in the UK is currently £288,949.
Amanda Bryden, head of mortgages, Halifax, said the 0.1% hike is equivalent to just £200 in cash terms meaning average house prices had largely plateaued since early 2024.
“This reflects a housing market finding its feet in an era of higher interest rates,” she said. “While borrowing costs remain more expensive than a few years ago, homebuyers are gaining confidence from a period of relative stability.
“Activity and demand is improving, evidenced by greater numbers of mortgage applications so far this year, while at an industry level mortgage approvals have reached their highest point in 18 months.
“Our recent research also found that buyers are adjusting their expectations, with first-time buyers in particular compensating for higher borrowing costs by targeting smaller properties.”
Bryden also acknowledged the role mortgage prices, which have increased in recently, had had on buyers.
“Mortgage rates have edged up again in recent weeks, primarily as a result of expectations around future Bank of England base rate changes,” she said, “with markets now pricing in a slower pace of cuts.
“If, as is still expected, downward moves in Bank Rate come into play later this year, fixed mortgage rates should fall. Combined with the resilience displayed by the housing market over recent months, we now expect property prices to rise modestly over the course of 2024.”
Halifax HPI: House prices by region
Northern Ireland remains the strongest performing nation or region in the UK, with house prices up by 3.4% on an annual basis in April. The average property here is £192,502.
In Wales annual property price growth was 1.1% in April (down from 1.9% in March) with the average home now costing £218,775.
In Scotland house prices rose 1.5% year-on-year to stand at £204,579.
In England the North West saw the strongest growth, up by 3.3% annually £231,599. London was the most expensive region in the UK to buy a home, with an average price of £539,336, prices rose 0.1% in the last year.
Supply and demand in the housing market
Halifax’s data comes after Nationwide’s House Price Index reported a fall in house prices of 0.4% in the month to April and an increase of just 0.6% annually.
Nicky Stevenson, managing director at national estate agent group Fine & Country, said house prices were ‘yo-yoing’ as buyers and sellers negotiated their way through the uncertain economy.
She added: “Consumers are expecting a fall in interest rates at some point this year. But with lenders increasing rates in the last few weeks, buyers have understandable hesitancy over the right price to offer, while sellers are trying to navigate how offers align with their expectations.
“Yet despite this confusion over pricing, demand is holding up well, with mortgage approvals continuing to rise and supply levels improving.
“All attention turns to the Bank of England, as a fall in the base rate this week would help to solidify confidence in the housing market.”
