House prices post first quarterly fall in four years as market stagnates

By Isabelle Fraser

House prices were 0.2pc lower in the three months to April than in the preceding three months CREDIT: DAVID ROSE

The quarterly rate of house price growth fell for the first time in more than four years, as the housing market stagnates.

House prices were 0.2pc lower in the three months to April than in the preceding three months, according to Halifax. This is the first quarterly decline since November 2012.

They fell 0.1pc between March and April, but the average price was still 3.8pc higher than the same month last year, less than half of the annual rate of growth last year.

This dip follows on from lower Nationwide house price data and a six-month low of mortgage approvals according to the Bank of England. Howard Archer, an economist at IHS Markit, said that this "fuels our belief that the housing market is being increasingly affected by the increasing squeeze on consumers and their concerns over the outlook."

Hansen Lu, at Capital Economics, said that a house price correction "seems unlikely", adding that "price growth has stalled because prices are so high", rather than any effect of the snap election. Huge levels of price growth in the last two years has led to a crunch on affordability.

The picture is not the same across the country, as in some areas - particularly in northern cities - prices are soaring as growth in the south slows. Jonathan Hopper, managing director of Garrington Property Finders, said that "the mediocre average figures mask the wildly different conditions at opposite ends of the market".

“Properties in some regions continue to see double-digit price reductions, while at certain price points in the most in-demand areas, gazumping is back with a vengeance.

“Such volatile conditions are being driven by two conflicting forces – patchy demand but a near universal shortage of supply. With Royal Institution of Chartered Surveyors reporting that the number of properties coming onto the market has fallen for 13 months in a row, in many areas buyers outnumber the number of homes for sale."

Martin Ellis, Halifax housing economist, said: “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.” Mr Archer has forecast that house prices will grow by just 2pc this year.

http://www.telegraph.co.uk/property/house-prices/house-prices-post-first-quarterly-fall-four-years-market-stagnates/