House prices fall as lenders reduce cost of mortgages

HOUSE prices slipped for the first time in six months in March, wiping £2,900 off the average sale.

Property values declined by 1pc compared to February, according to the latest Halifax house price index. A typical UK home now costs £288,430 – shaving off around £2,900, the lender said.

The dip comes amid falling mortgage rates and a surge in houses entering the market. Property portal Rightmove recorded a 45pc weekly rise in homes for sale on its website on the Thursday before Easter – the third biggest day for new listings since August 2020.

The best two-year mortgage deal around comes with a 4.88pc rate, according to data firm Moneyfacts. The average two-year fixed rate still sits at around 5.81pc.

However, Kim Kinnaird, director of Halifax Mortgages, said with only modest improvements to buyer affordability on the horizon, scope for significant house price increases this year is likely to be limited.

Bank of England figures out this week show mortgage approvals in February up to their highest level since the Liz Truss premiership and the mini-Budget in September 2022.

Kinnaird said: “That a monthly fall [in prices] 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 ... Taking a slightly longer-term view, prices haven’t changed much over the past couple of years … and are still almost £50,000 above pre-pandemic levels.”

In February, the Bank of England’s Monetary Policy Committee voted to maintain the Bank Rate at 5.25pc.

Markets expect the Bank Rate to start coming down from August, having previously bet on June.