House prices strengthened in March to post their biggest monthly gain since August, according to Halifax, the UK’s biggest mortgage lender.
The average price of a UK home rose 1.5% in March to hit £227,871, the highest recorded price. Prices in the three months to March were 2.7% higher than a year earlier, up from the 1.8% annual growth recorded in February.
The strong house price growth came as a surprise after months of lacklustre growth and declines in December and January reported by Halifax, part of Lloyds Banking Group. Rival lender Nationwide reported a 0.2% decline for March to £211,625, the second monthly fall in a row.
However, Halifax warned that monthly changes could be volatile. Prices fell 0.1% between January and March compared with the previous three months, the second consecutive quarterly decline.
Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said: “The jump in Halifax’s measure of house prices in March just looks like volatility, rather than the start of a strong upward trend. Halifax’s index is prone to large swings; the standard deviation of month-to-month growth since 2010 has been twice as high as for Nationwide’s measure.”
Russell Galley, managing director at Halifax, said: “Activity levels, like house price growth, have softened compared with a year ago. Mortgage approvals are down compared to 12 months ago, whilst home sales have remained flat in the early months of the year. This lack of direction in the housing market is in stark contrast to the continuing strength of the UK jobs market.”
He said low unemployment, low mortgage rates and the ongoing shortage of properties for sale would underpin price growth in coming months. Halifax is predicting annual price growth to remain close to 3%.
Mortgages in Britain have reached their most affordable level in a decade, according to new research from Halifax. Typical mortgage payments accounted for less than a third (29%) of homeowners’ disposable income in the fourth quarter of 2017, compared with almost half (48%) in 2007.
The forecast group EY Item Club believes 2018 will be a difficult year for the housing market, predicting that house price gains will be limited to a modest 2%. It said the abolition of stamp duty for first-time buyers of properties costing up to £300,000 (and on the first £300,000 for homes costing up to £500,000) should provide some support to the market in the next few months.
Source: The Guardian
