UK house prices fall at fastest rate in nearly eight years


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UK house prices posted their largest monthly drop in almost eight years in April in the latest sign the housing market is weakening, according to the country’s biggest mortgage lender.

The 3.1% drop, the biggest since September 2010, knocked £7,140 off the average price of a home to £220,962 last month, said Halifax, which is part of Lloyds Banking Group.

Halifax said housing demand had softened since the start of the year, with both mortgage approvals and completed home sales edging down. The number of homes being put on the market is also low.

Prices are unlikely to collapse, however, as the labour market remains strong, with unemployment continuing to fall and wage growth finally picking up.

Russell Galley, the Halifax managing director, said the strong job market should help to ease pressure on household finances, and is expecting annual price growth of zero to 3% this year
House prices have been falling in London for some time, especially in wealthier areas, while values in some areas outside the capital are still rising. Recent regional figures from Halifax showed the price of a typical house in London was £430,749 between January and March, the lowest since the end of 2015.

Jeremy Leaf, a north London estate agent, said the latest figures were disappointing.

“We are entering what is supposed to be the busy spring buying season, which tends to set the tone for the rest of the year,” he said.
More recently, activity and listings have picked up but we are finding the market still quite sensitive and only those prepared to negotiate hard are moving on.”

Samuel Tombs, the chief UK economist at Pantheon Macroeconomics, said: “Looking ahead, consumers’ low confidence and modest rises in mortgage rates suggest that demand will continue to weaken.

“Prices will fall rapidly, though, only when a large proportion of homeowners are forced to sell up. With unemployment and borrowing costs low and credit freely available, few people are being forced to sell their homes quickly. A period of broadly flat house prices, therefore, remains the most likely outcome.”

Jerry Russell

Staff member
With a strong labor market and ongoing easy money, my guess is that the economy is moving into a period of "stagflation": prices will start to slowly move up again.

Moving to Economics category.