Gulf Today

UK house prices fall 1% in March


LONDON: British house prices fell 1.0 per cent in March, their first drop since September 2023, figures from mortgage lender Halifax showed on Friday, contrastin­g with the more upbeat picture from other housing data earlier in the week.

Halifax, part of Lloyds Banking Group, Britain’s largest mortgage lender, said the drop was not entirely unexpected ater price rises in the previous five months and continued high interest rates.

But it leaves prices just 0.3 per cent higher than a year earlier - below both the median forecast for a 1.45 per cent rise in a Reuters poll of economists and the 1.6 per cent increase reported on Tuesday by Nationwide, Britain’s second-largest mortgage lender.

In recent months, activity in Britain’s housing market has been recovering after a slump in late 2022 when Liz Truss’ brief term as prime minister roiled financial markets and the Bank of England raised interest rates more sharply.

BOE data on Tuesday showed that February had the highest number of mortgage approvals since September 2022, as wage growth began to outpace inflation and BOE rate cuts became a more concrete possibilit­y.

However, Halifax director Kim Kinnaird said financial markets had become less optimistic about the degree and timing of rate cuts due to stickiness in some underlying inflation measures.

“This has stalled the decline in mortgage rates that had helped to drive market activity around the turn of the year,” she said.

Investors currently expect the BOE to start cuting rates in June or August, and for rates to fall to around 4.5 per cent by the end of the year from 5.25 per cent now.

Imogen Patison, an economist at consultant­s Capital Economics, said Halifax’s house price data tended to be more sensitive to movements in interest rates than Nationwide’s.

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A person jogs past a row of residentia­l housing in south London, Britain.
Reuters ↑ A person jogs past a row of residentia­l housing in south London, Britain.

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