UK house price growth continues to slow, Halifax shows
UK house price growth in the three months to April slowed more than expected, with the rate of growth compared to the preceding quarter and the same quarter last year both at their lowest since last autumn.
Mortgage lender Halifax's volatile monthly index fell 0.8% month-to-month in April.
Data showed house prices in the three months to April were 9.2% higher than in the same three months last year, though this growth was down on the 10.1% rate a month ago and short of the forecast 9.6% gain.
Moreover, house prices in the three months from February to April were 1.5% higher than in the preceding three months, virtually half the 2.9% published a month ago.
Stuttering UK economic activity, a consumer confidence possibly exacerbated by worries about the Brexit vote and a hit from a clampdown on buy-to-let property, were all stirred into the housing market pot.
"Both the quarterly and annual rates are at their lowest since last autumn," said Halifax housing economist Martin Ellis.
“Current market conditions remain very tight as the severe imbalance between supply and demand persists. This situation, combined with low interest rates and rising employment and real earnings, should continue to push house prices up over the coming months."
He added that weakening sentiment regarding house price prospects and a dip in consumer confidence, however, suggest that annual house price growth is likely to ease.
"Brexit fears might subdue prime London property prices, but previous bouts of political uncertainty have seldom depressed the whole market," said Pantheon Macroeconomics. "As such, we expect price growth to remain strong, bolstering the case for higher interest rates to prevent household debts eventually reaching unsustainable levels."
Economist Howard Archer from IHS Global Insight said it was highly likely there would be a major easing in buyer interest from the buy-to-let and second house buyers given the recent rise in Stamp Duty.
"Increased domestic economic and political uncertainties are also likely to rein in housing market activity in the run-up to June’s referendum on UK membership of the European Union (EU). Consequently, house prices may well be softer for the next few months."
But he said that housing market activity was likely to regain limited momentum in the second half of 2016 on the assumption that a vote to stay in the EU reduces uncertainty and supports a pick-up in economic activity.
"High employment, decent purchasing power and low interest rates should underpin house buyer interest once the referendum fog has disappeared."