The average price of a home in the UK is now £220,962, after dropping by more than £7,000 in April. According to Halifax, house prices plummeted during the first quarter of the year, with prices decreasing by 3.1% between March and April 2018, and evidence pointing towards a further market slowdown.
While UK’s average house prices have grown consistently on a year-on-year basis, this year, the growth rate has decreased by 0.5 percent at 2.2%, compared to 2.7% last year. While the number of mortgage approvals witnessed a fall in March, fewer homes were sold between February and March. Moreover, low consumer confidence, combined with shrinking disposable incomes has also cast a further pall over the market. Halifax further revealed that its Housing Market Confidence Tracker found optimism in the housing market was at a five year low, although it did affirm that many consumers were more positive about growth going forward.
The effects of the property slowdown are already becoming apparent, especially in London, widely assumed to be the most expensive city in Britain. Recent Land Registry data reveals that parts of London and other areas are already experiencing big price falls this year. The news has been met with positivity by first-time buyers, who are keen to leverage their chance of getting on the property ladder. Especially considering the steady climb of house prices over the last decade has made home ownership a distant dream for millions of people. Moreover, agents have also greeted price corrections with enthusiasm, as these may help in the recovery of transaction levels and improve business activity.
Forecasts suggest that if the slowdown continues for the rest of the year, 2018 may prove to be the least active year for the housing market since 2013. However, property market watchers seem to think this a remote possibility, and unlikely to spell a meaningful fall in house prices. The ready availability of mortgages, low mortgage rates, and the fact that the demand continues to exceed the supply will ensure a big fall in house prices is at best a short-lived occurrence.