House prices fall for second month in a row

Falling houses

UK house prices fell for the second month in a row in April, data from Halifax has revealed.

The average price in April fell by -0.2% from March to £177,648 and marked the third monthly price fall in the past six months.

However, looking at the quarterly change, which is less volatile and more reliable, prices between February and April were up by 8.5% yearly, and 2.3% compared to the previous quarter.

Meanwhile, in March the number of homes sold and mortgages approved by lenders both fell.

The number of home sales went down by 5% to 106,070 during the month, for the first time in almost a year, according to HMRC. But that figure was still 29% higher than it had been a year earlier.

Mortgage approvals for house purchases also fell in March by just under 4% to 67,135, from 69,592 in February, according to the Bank of England. Given that they also decreased between January and February, there has been a reduction of almost 12% in approvals in the past two months.

There remains a gap between the number of sellers and buyers in the property market, and it is growing. The Royal Institute of Chartered Surveyors said that while new buyer enquiries remained steady in the first three months of 2014, the number of homeowners listing their property for sale fell in every month during the same period.

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Demand remains strong

Stephen Noakes, mortgages director at Halifax, said: "Although mortgage approvals have now declined for two consecutive months and property transactions fell in March, on an annual basis housing demand still remains strong.

"Housing demand continues to be supported by an economic recovery that is gathering pace, rising consumer confidence, low interest rates and wage growth finally beginning to outgrow consumer prices. However, with supply of properties being slow to respond to market conditions, stronger demand in the past year has resulted in upward pressure on house prices."
Nicholas Ayre, managing director of buying agency Home Fusion, added: "What we are seeing is a housing market that is jammed with homeowners refusing to sell up because they are worried about where they are going to live. Not only are transactional costs high – as well as the sticker price, you have stamp duty, various legal costs and stamp duty - there is also the stress and hassle factor. No wonder people are staying put."