ONS: HOUSE PRICES FALL BY 1.9% IN APRIL
In an article today by Ryan Bembridge of the Property Investor Post he reports that house prices fell by 1.9% between March and April – bringing the annual rate of growth down to 8.9% annually, the ONS House Price Index has found.
The stamp duty holiday’s original deadline was the end of March, which likely skewed the market.
Typically house prices fell by around £5,000 from March to £250,772.
Sarah Coles, personal finance analyst, Hargreaves Lansdown, said: “House prices dropped in April, which is bound to unsettle homeowners after almost a year of accelerating price rises. However, this isn’t necessarily the beginning of the end for house price growth, it’s more likely to be a sign of what an arbitrary deadline can do to a market.
“At this stage we’re not expecting this to be the ultimate turning point for the market, but it’s a useful wake-up call for buyers, and a reminder that house prices aren’t a one-way street.
“The small drop in April doesn’t come as an enormous shock. The stamp duty holiday deadline sparked a frenzy, as buyers rushed to complete before the end of March. So much demand focused into a relatively short window created a price bump in March. In April we saw this drop back slightly, as we tend to do after this kind of deadline.
“A change in direction for prices is bound to spark concern among homeowners. However, it’s worth seeing this in context: prices are still up almost 9% in a year, and although it’s the first time price rises have slowed since July last year, it’s also still the second highest annual price rise figure we’ve seen since 2014.”
Despite having the lowest house prices in the UK, the North East saw the highest annual growth of 16.9%.
The next highest growth area is Yorkshire and the Humber (12%), followed by the North West (11.8%) and the West Midlands (11.2%).
Nitesh Patel, strategic economist at Yorkshire Building Society, said: “At a regional level, prices are prices are growing at a faster rate in the north, Wales and Scotland than in southern England.
“In North East average price has grown by 16.9% in year to April, whereas in London the increase was a relatively modest 3.3% over the same period.
“Demand continues to outstrip supply, driven by the Stamp Duty holiday, low borrowing costs and improving earnings growth, whilst the number of homes coming on to the market remains low.
“That said, changing consumer tastes are perhaps having a bigger impact, particularly for home movers with plenty of equity. Buyers are looking for more space, both inside and outside their homes, and many appear to have become more flexible on location, which may be driving activity in regions where you get more bang for your buck.”
House prices in London are still the highest in the UK, but they dropped from an average of £500,000 in March to £492,000 in April.
Annually prices have risen by 3.3% in the capital, the lowest increase of any region.
Marc von Grundherr, director of Benham and Reeves, said: “London has been slowly simmering in comparison to the rest of the UK market having been hit hardest by pandemic uncertainty and a reduction in foreign homebuyer demand, in particular.
“However the tide is slowly starting to turn and while there’s a very real chance that the wider UK market will come off the boil by the end of the year, London will continue to bubble.”