Annual house price growth remains at four-year low - Halifax
House prices in the three months to April were up 3.8% on the same period a year ago, unchanged from March and remaining at the lowest annual rate since May 2013, according to data from lender Halifax.
Economists had been expecting house price growth to slow to 3.6%.
Meanwhile, house prices were down 0.1% to £219,649 compared to March when they were flat, marking the first monthly drop since January, while the quarterly change was a 0.2% decline.
Martin Ellis, Halifax housing economist, said: "Housing demand appears to have been curbed in recent months due to 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.
“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.”
Howard Archer, chief UK and European economist at IHS Markit, said: "April’s slight dip in house prices reported by the Halifax - following on from lower Nationwide data and the Bank of England reporting mortgage approvals at a six-month low in March - fuels our belief that the housing market is being increasingly affected by the increasing squeeze on consumers and their concerns over the outlook.
"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."
As a result, Archer expects house price gains over 2017 to be limited to 2.0%. There is a very real and mounting possibility that it could come in lower than that, he said, adding that June’s general election is unlikely to materially affect the housing market.