House prices up 5% in year to April
House prices in the three months to April were 5% higher than in the same three months a year earlier, said Halifax – a robust and surprise increase in a market that had been considered muted.
The average UK house price now stands at £236,619.
On a monthly basis house prices were up by 1.1% in April, compared to a fall of 1.3% in March.
Are buyers really throwing off the Brexit shackles, or is the recent volatility in the monthly data indicative of something else?
Skewing the figures
According to Halifax, this month’s figures were driven by a higher volume of London sales and more expensive new build properties.
In a market where stock and overall transactions are lower, any change within the make-up of the data can have a disproportionate effect and skew the figures.
Sam Mitchell, CEO, online estate agents Housesimple, explained: “Since last September, house prices have trended up one month and down the following month.
“This bumpy ride is symptomatic of a property market that continues to be held back by low stock levels and ongoing uncertainty around Brexit which is making buyers hesitant to commit.”
Lucy Pendleton, founder director of estate agents James Pendleton, added: “The index has already come under scrutiny this year after months of erratic monthly growth figures. These can be more sprightly than the smoothed annual and quarterly numbers, but even so, they’ve been turning heads with the extremes with which they have been moving.
“This time it’s the turn of quarterly and annual growth figures, which have leapt up.
“By this measure for April, the housing market is still comfortably making money for homeowners in real terms.
“One explanation for ricocheting growth figures like this is persistently low stock levels. In sought after areas, this can lead to demand being supercharged one minute and gone the next, with price rises coming in waves as brief competitions for limited numbers of homes come and go.”
What is more reliable is the longer term growth trend. It’s now 10 years since the lowest point of the Halifax house price index in the wake of the financial crisis in April 2009 – and average prices have bounced back.
Russell Galley, managing director of Halifax, said: “Over the past decade annual house price growth has seen the average price increase by £81,956, or an average rise of 4.3% each year.”