Job creation worries and financial squeeze blamed for house price 'stagnation'

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House prices have "stagnated" as a Brexit squeeze on household finances and a slower pace of job creation continue to dampen demand.

The Halifax house price index showed house prices between February and April were 0.2% lower than in the previous three months, the first quarterly fall since November 2012.

Halifax added house prices fell by 0.1% between March and April and there has been "virtually no change" in prices over the past three months.

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

"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."

Consumers have been stung by the collapse in the value of the pound since last year's June referendum, which has resulted in soaring shop price inflation and eroded spending power.

The annual rate of house price growth remained at 3.8% in April, the lowest rate since May 2013, Halifax said.

The average house price across the UK now stands at £219,649.

Howard Archer, an economist at IHS Markit, said: "We suspect markedly weakening consumer fundamentals, likely mounting caution over making major spending decisions, and elevated house price to earnings ratios will weigh down further on housing market activity and house prices over the coming months.

"However, a shortage of supply is likely to put a floor under prices."

The news come after Bank of England figures showed last week the number of mortgage approvals being made to home buyers fell to a six-month low in March.

It was the second month in a row that the number of mortgages getting the go-ahead for house purchase has edged downwards, with February also seeing a decline.

However, Mr 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."