The latest data and analysis from Halifax has revealed that house prices in the last three months to March were 2.7% higher than in the same three months a year earlier, edging up from the 1.8% annual growth recorded in February. According to the lender's figures, the average price in March was £227,871.
House prices in the latest quarter (January-March) were -0.1% lower than in the preceding three months (October-December), the second consecutive decline on this measure. On a monthly basis, prices grew by 1.5% in March this follows a 0.5% rise in February; monthly changes can be volatile.
Mortgages in the UK are at their most affordable level in a decade.
Russell Galley, Managing Director, Halifax, said: "House prices in the three months to March were largely unchanged compared with the previous quarter. The annual rate of growth continues to be in a narrow range of under 3%; though the average price of £227,871 is a new high.
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. The unemployment rate is now the joint lowest since 1975 and in the three months to January there were 402,000 more people in work compared to a year earlier.
In the coming months we expect price growth to remain close to our prediction of 3% despite the very positive factors of continuing low mortgage rates, great affordability levels and a robust labour market. The continuing shortage of properties for sale will also support price growth.
Russell Quirk, founder and CEO of Emoov.co.uk, commented: "While we have seen a tentative start to the year, it would seem that the spring is starting to return to the step of the UK market where price growth is concerned.
Although market activity over the first quarter has remained fairly flat, there are signs that momentum is beginning to build and we should see a degree of stability return over the coming quarter.
The current affordability of mortgages, coupled with a reduction in unemployment and an insufficient level of housing stock, will continue to stimulate the market and price growth should exceed wider predictions over the latter part of the year."
Jeff Knight, Director of Marketing at Foundation Home Loans, commented: “News that first-time buyers are facing prices over five times higher than the average income - with an exponentially higher rate in London – solidifies why affordability continues to impact levels of property ownership and the rental market.”
Growing demand for both types of property without increasing supply will only push prices up further, so ongoing issues with overdue housebuilding and planning targets not yet met is bad news. For years, millennial home owners and renters have been priced out of the capital. While the current low mortgage rate environment and cuts to stamp duty may be proving favourable for some, it remains to be seen how this will play out regionally.”
Paul Osborn, Chief Executive for Foresters Friendly Society commented: “Despite continued uneasiness around lingering political decisions and the impact on house prices in top locations across the UK, younger property hunters are still facing a range of challenges, particularly when it comes to affordability. Increasing awareness of products like the Lifetime ISA (LISA) to those under 40 years old is vital not only to maintain activity levels in the UK property market but also to unburden those on that seemingly endless search for their first home.”
Offering a 25% boost to annual savings, these vehicles are specifically designed to help bridge the savings gap and bring people closer to reaching their long-term financial goals. All too often people struggle with the concept of having to start the saving process early to build up a sizeable nest egg. However, through improved engagement with the range of saving plans available, first-time buyers and young families could feel financially secured.”
Lucy Pendleton, founder director of independent estate agents, James Pendleton, said: “These numbers represent an impressive sprint finish for the first quarter, even if it does match the annual rate of growth for the last three months of 2017.
Pent up demand looks to have been given new life in March despite one of the worst cold snaps in years. The Beast from the East failed to dent the market in the same way it hurt the services sector last month.
The Halifax alludes to how low unemployment is fuelling demand but the quality of the jobs created lately makes Stamp Duty breaks for first-time buyers away from London and persistent low mortgage rates the most likely causes.”