UK house prices experience largest drop in almost eight years

UK house prices experience largest drop in almost eight years

According to the Halifax, house prices across the UK went through their biggest monthly fall for almost eight years in April, with demand for homes weakening across the nation.

Between March and April, Halifax claimed that house prices dropped by 3.1%, which is the biggest decline since September 2010.

The bank have said that in the early months of 2018, housing demand has notably softened, with both completed home sales and mortgage approvals on the decline.

Looking at the figures from an annual perspective, and price growth had slowed down to 2.2%, from March’s rate of 2.7%.

Also according to Halifax, the average price of a house in the UK now stands at £220,952.

However, despite the sharp drop in prices between March and April, Halifax are of the belief that the monthly figures as a whole tended to be quite volatile, and as such, are sticking to their existing forecast range for price growth in 2018.

Speaking on the matter, Russell Galley, managing director at Halifax, is still optimistic that annual price growth will remain as the bank predicted, and believes that the UK labour market is looking healthy.

“The UK labour market is performing strongly with unemployment continuing to fall and wage growth finally picking up,” Galley said.

“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 of 0% and 3% this year.”

Adding further comment was Howard Archer, who is the chief economic adviser to the EY Item Club, and he is of the opinion that it’s unlikely that the market will change dramatically for house buyers, and that it’s likely to “remain challenging”.

“Consumers have faced an extended serious squeeze on purchasing power, which is only gradually easing,” Archer said.

“Additionally, housing market activity remains hampered by relatively fragile consumer confidence and limited willingness to engage in major transactions.

“The housing market is clearly currently struggling to gain traction and we suspect that any meaningful upturn will remain elusive over the coming months.”

Recent figures suggest that the squeeze on wages by higher inflation is easing.

The Office for National Statistics said that the Consumer Prices Index measure of inflation fell to 2.5% in March. In its most recent data on employment, the ONS said wages grew by 2.8%.

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