UK house prices: First quarterly fall since 2012 with annual growth at a standstill, Halifax house price index says

 
Caitlin Morrison
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House price growth has ground to a halt, Halifax says (Source: Getty)

Annual house price growth in the UK last month remained at 3.8 per cent, the same level reported in March, according to the Halifax house price index - but the lender also reported the first quarterly decline in over four years.

House price in the three months to April were 0.2 per cent lower than in the previous quarter, the first time prices have dipped on a quarterly basis since November 2012.

Meanwhile, house prices fell by 0.1 per cent on a monthly basis, with the average cost of a property now standing at £219,649.

Halifax also noted housing supply remains very low. The number of properties coming on to the market fell for the 13th month in a row in March, which Halifax said "contributed to a decline in the average stock levels on estate agents’ books, taking them to a new historic low".

House prices: Monthly and quarterly changes

Stagnation

"House prices have stagnated over the past three months," said Martin Ellis, Halifax housing economist.

"Housing demand appears to have been curbed in recent months due to a deterioration in housing affordability driven by the sustained period of rapid house price growth during 2014-16.

"Signs of a decline in the pace of job creation, and the beginnings of a squeeze on households' finances as a result of increasing inflation, may also be constraining the demand for homes."

However, Ellis added: "A continued low mortgage rate environment, combined with an ongoing acute shortage of properties for sale, should nonetheless help continue to underpin house prices over the coming months."

Reaction to the index

"Today’s reduction in momentum for house price inflation is not necessary a bad sign for our housing market," said ​Jeremy Duncombe, director at Legal & General Mortgage Club.

"It is all too easy to become preoccupied with these monthly fluctuations but what remains unchanged is the staggering gap between house price inflation and wage inflation.

"With the General Election on the horizon, it is important that the progress our current government has made with the housing white paper does not fall down the priority list. Whatever the outcome, tackling our nation’s housing shortage needs to be at the top of the agenda for all political parties. The General Election provides the perfect opportunity for the successful party to truly make their mark and restructure of housing market once and for all."

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