The latest House Price Index has shown that although the average house price fell in April, it remains higher than at the start of 2017.
The report from Halifax shows that after prices rose by 1.6% in March, there was a drop of 3.1% during April, a fall that headline writers have been quick to sensationalise.
Sam Mitchell, CEO of Housesimple, said: “As swings in monthly figures go, this is worthy of an election night special.”
However, when you delve a little deeper and look over a longer period, the months leading up to April this year saw a 2.2% increase in house prices compared to the same period in 2017.
This demonstrates the volatility of short-term house price data and reveals that sometimes the media are quick to make mountains out of molehills in order to engage visitors.
Long-Term Outlook Remains Unchanged
Russell Galley, Managing Director, Halifax, said: “We’ve seen annual house price growth ease from 2.7% in March to 2.2% in April. House prices in the three months to April were 0.1% lower than the previous three months.
“Both the quarterly and annual rates have fallen since reaching a recent peak last autumn, with these measures providing a more stable indication of the underlying trend than the monthly change.
“Housing demand has softened in the early months of 2018, with both mortgage approvals and completed home sales edging down. Housing supply – as measured by the stock of homes for sale and new instructions – is also still very low.
“However, the UK labour market is performing strongly with unemployment continuing to fall and wage growth finally picking up. These factors should help to ease pressure on household finances and as a result we expect annual price growth will remain in our forecast range 0-3% this year.”
Therefore, while there are still challenges ahead, it’s clear that the long-term prediction of static to modest growth remains unchanged.
While the recent drop should be monitored, there is certainly no need to panic just yet.
