The general consensus among the main house price reports for March was a fall, but is this anything to be too concerned about?

The Halifax report suggests that there was a monthly change of -1.0%, although it does also report quarterly growth of +2.0% and an annual rise of +0.3%.

Kim Kinnaird, Director of Halifax mortgages said – 

“That a monthly fall should occur following five consecutive months of growth is not entirely unexpected particularly in view of the reset the market has been going through since interest rates began to rise sharply in 2022. Despite this house prices have shown surprising resilience in the face of significantly higher borrowing costs”

The Nationwide report suggests a monthly fall of -0.2%, but that the annual growth is at +1.6%.

Commenting on the figures, Nationwide’s Chief Economist Robert Gardner said

“If these trends are maintained, activity is likely to gain momentum, though the pace of the recovery is still likely to be heavily influenced by the trajectory of interest rates. 

The Rightmove House Price Index which looks at asking prices, reported a +1.5% rise in March.

It states that this is the ‘biggest for 10 months as the market continues its recovery after a muted 2023.’ Although it also goes on to say ‘ despite a better-than-expected start to the year, the market remains sensitive to pricing and external events’

The Hometrack House Price Index which breaks prices down regionally, said that annual UK house price inflation is at -0.3%.

It goes on to say that ‘2024 is set to be a year of better sales volumes and flat house prices’

Our Thoughts

March was an interesting month. Mortgage rates crept up again in February and we noticed that enquiries from Home Movers seemed to stall around the middle of the month.

However, as we prepared for a continued period of this as we moved towards the Easter holidays, we saw an uptick in activity before the Bank Holiday weekend which has remained consistent since.

Based on the reports and what we’ve seen, the activity we’ve seen would support Hometrack’s comment that 2024 is likely to see better volumes with house prices remaining generally quite flat.

With affordability constraints and a lot of borrowers being particularly sensitive to any type of increase in interest rates, we may see many ‘stop-start’ periods as a result of these factors. However, fingers crossed, it does feel like the market is moving back towards some normality.