Business

UK house prices fall by sharpest rate in 8 years

UK house prices fell by 3.1 per cent month-on-month in April - the biggest monthly decline since September 2010
UK house prices fell by 3.1 per cent month-on-month in April - the biggest monthly decline since September 2010 UK house prices fell by 3.1 per cent month-on-month in April - the biggest monthly decline since September 2010

UK house prices fell by 3.1 per cent month-on-month in April - the biggest monthly decline since September 2010, according to latest Halifax index.

The sharp decrease took the average UK house price to £220,962. It followed a 1.6 per cent increase in March, which Halifax said reflects "the volatility in the short-term monthly measure".

The annual house price rise also cooled, from 2.7 per cent in March to 2.2 per cent in April.

Russell Galley, managing director of Halifax, said: "Housing demand has softened in the early months of 2018, with both mortgage approvals and completed home sales edging down.

"Housing supply - as measured by the stock of homes for sale and new instructions - is also still very low.

"However, the UK labour market is performing strongly with unemployment continuing to fall and wage growth finally picking up.

"These factors should help to ease pressure on household finances and as a result we expect annual price growth will remain in our forecast range of 0 to 3 per cent this year."

Sarah Beeny, founder of estate agent Tepilo.com, believes the drop is a slight "seasonal blip" caused by some very bad weather periods.

"I think we'll see a steady and sustainable pace of growth throughout the rest of 2018," she said.

Howard Archer, chief economic adviser at EY ITEM Club, said the 3.1 per cent monthly price fall "was a much sharper drop than expected even allowing for the fact that some correction was always likely after prices had surprisingly spiked up 1.6 per cent month-on-month in March."

"The housing market is clearly currently struggling to gain traction and we suspect that any meaningful upturn will remain elusive over the coming months. We expect house price gains over 2018 will be limited to a modest 2 per cent. At this stage, we expect prices to rise by 3 per cent in 2019," he added.