UK house prices have fallen for the first time in five years, according to the new Halifax House Price Index.
The monthly report shows that there was a 0.2 per cent reduction in the average property price in the three months to April 2017, compared with the previous quarter. This is the first recorded fall since November 2012.
A monthly fall was also witnessed, with the index recording a 0.1 per cent reduction in April compared with March, staying consistent with the past three months.
On an annual basis, house prices are still higher, with prices in the three months to April being 3.8 per cent higher than in the same three months a year earlier. This figure was unchanged from March and far lower than the ten per cent annual growth reached in March 2016.
It is the lowest annual rate since May 2013, with all three metrics collectively pointing towards a gradual downward trend, making some homes more affordable for buyers.
Sales figures point towards increasing stability in early 2017, with the figure very similar to the levels recorded in both January and February, at 102,810.
Overall, sales in the first three months were six per cent higher than in the final quarter of 2016, with a slight increase in activity consistent with a slight fall in prices.
Confidence in the country’s property market has also stabilised following a record decline, according to Halifax’s Housing Market Confidence Tracker, which tracks consumer sentiment on whether house prices will be higher or lower in a year’s time.
The latest tracker shows a small improvement compared with October 2016, after the EU referendum result, with 58 per cent expecting the average property price to rise in the next 12 months, compared to just 14 per cent who expect them to fall.
Martin Ellis, Halifax housing economist, observed that house prices have levelled out over the past three months, but noted that continuing low mortgage rates should underpin house prices over the coming months.
The upcoming General Election is also unlikely to affect the property market, according to the Council of Mortgage Lenders (CML), which has anticipated that “business as usual” will be observed until after June 8.
Some have even speculated that the vote could serve to boost the market in the medium term once the election is over, due to the eradication of questions around the legitimacy of the EU vote, and a larger degree of stability going forward.