Halifax finds housing activity remains ‘heightened in the short-term’

‘For now, at least, despite the current economic uncertainty, the strong increases we’ve seen in house prices show little sign of abating’.

So said Halifax managing director Russell Galley, reporting on the mortgage lender’s latest house price survey.

‘Demand in the housing market remains firm and mortgage servicing costs are relatively stable with fixed-rate deals making up around 80 per cent of mortgages on homes across the industry, protecting many households from the effects of rate rises so far.

‘However, the headwinds facing the wider economy cannot be ignored. The house price to income ratio is already at its highest ever level, and with interest rates on the rise and inflation further squeezing household budgets, it remains likely that the rate of house price growth will slow by the end of this year’.

Halifax found that house prices had increased by 1.1 per cent in April, the tenth month in a row that prices had increased, and the longest run of continuous gains since the end of 2016. The annual rate of hose price growth fell slightly in April, from 11.1 per cent in March to 10.8 per cent.

‘Housing transactions and mortgage approvals remain above pre-pandemic levels and the continued growth in new buyer enquiries suggests activity will remain heightened in the short-term’, said Galley. ‘The imbalance between supply and demand persists, with an insufficient number of new properties coming onto the market to meet the needs of prospective buyers and strong competition to secure properties driving up prices.

Halifax said there was evidence that demand remains centred on larger, family homes, rather than smaller properties such as flats. Over the past year, prices for detached and semi-detached properties have risen by over 12 per cent, compared to just 7.1 per cent for flats.

Northern Ireland overtook the South West of England as the UK’s strongest performer in terms of annual price house inflation, recording a 14.9 per cent rate of annual increase.

Wales was not far behind with annual house price inflation of 14.2 per cent. 

In Scotland the rate was 8.3 per cent.

London prices continued to rise more slowly than the rest of the UK, but even they were up 6.2 per cent on the year.