Annual house price growth surged to 5% in April, says index
Annual house price growth accelerated sharply to reach 5% in April, according to an index.
The annual pace of growth nearly doubled compared with a 2.6% year-on-year increase recorded in March, figures from Halifax show.
It was the highest annual growth rate since a 5.1% increase in February 2017, Halifax said.
House prices increased by 1.1% month on month in April, compared with a fall of 1.3% in March.
The average house price across the UK now stands at £236,619.
Halifax said house prices have been increasing by 4.3% annually on average since reaching a low point of £154,663 in April 2009, following the financial crisis.
It said the 5% annual increase in house prices seen last month follows a period of particularly low house price growth over the same period a year earlier.
This has affected year-on-year comparisons, the report said.
Recent higher numbers of property sales taking place in London, where prices tend to be higher, as well as some sales of more expensive new-build properties, have also had an impact on the price growth figures, Halifax said.
Russell Galley, managing director, Halifax, said: “The index has seen a weaker pace of growth over the last three years, which is consistent with the easing of transactions volumes and housing market activity reflected in Rics (Royal Institution of Chartered Surveyors), Bank of England and HMRC (HM Revenue and Customs) figures.
“Looking further back, this April also marks 10 years since the lowest point of the Halifax house price index following the financial crash in 2008.
“Over the past decade annual house price growth has seen the average price increase by £81,956, or an average rise of 4.3% each year.”
Howard Archer, chief economic adviser at EY Item Club, pointed out that, in April 2018, house prices had fallen by 3.2% month on month.
He said: “It is possible that the avoidance of a no-deal Brexit at the end of March could provide a modest boost to the housing market through easing some of the immediate uncertainty and concerns.
“However, we suspect it is more probable that, with Brexit being delayed until a flexible deadline of October 31, prolonged uncertainty will weigh down on the economy and hamper housing market activity.
“Consequently, we suspect house prices will rise only 1% over the year.”
Looking further ahead, he said: “Should the UK leave the EU with a deal at the end of October, we believe reduced uncertainty and modestly improved economic activity could see house prices rise by around 2% over 2020.
“If the UK should still ultimately leave the EU without a deal, we believe house prices could quickly drop around 5% amid heightened uncertainty and weakened economic activity.”
Tomer Aboody, director of property lender MT Finance, said house sales numbers could fall off again as Brexit gets closer.
He continued: “But for now, with Brexit kicked into the distance, people are transacting and getting on with their lives.”
Jeremy Leaf, a north London estate agent and a former Rics residential chairman, said: “The market is quite volatile, bearing in mind the fall in prices last month.
“The price increases recorded are probably more to do with shortages of stock and lower transactions than sustainable market strength.”
Mark Harris, chief executive of mortgage broker SPF Private Clients, said: “The lack of supply and properties coming to the market is most likely continuing to support property prices, while cheap mortgage rates continue to attract those who are ready to take the plunge.”