While monthly house prices continued to rise, annual growth slowed and is now below July’s peak of 10.2 per cent, new data has revealed.
Halifax’s monthly house price index, published today (9 April), revealed that monthly house prices grew by 0.4 per cent in March, however annual growth fell slightly to 8.1 per cent from February’s 8.3 per cent.
Martin Ellis, housing economist of Halifax, said that the recent return to real earnings growth for the first time in several years, very low mortgage rates and last December’s stamp duty changes are supporting housing demand.
“The rising level of house prices in relation to earnings should, however, curb house price growth and activity.
“The annual rate of house price growth, which has continued to ease in the first quarter of 2015, is forecast to end the year at 3 per cent to 5 per cent.”
Mark Harris, chief executive of mortgage broker SPF Private Clients, added that government schemes aimed at helping first-time buyers are proving successful, with the Help to Buy Isa announced in the Budget predicted to “raise awareness even further”.
However, he added that the lack of inflation and talk of an interest rate cut rather than a rise, could have an impact on people’s inclination to take on new debt.
“There are certainly plenty of cheap mortgage rates to tempt them. While swap rates have ticked up in past weeks, they have since fallen and with lots of capacity in the market as lenders such as HSBC and Tesco look to boost their offering via brokers, mortgage rates are likely to remain extremely competitive in the months to come.”
emma.hughes@ft.com
