Surprise house price growth drop – a slowdown or a blip?
This is down from a 9.9 per cent increase in the year to March. It’s the first fall in growth for almost a year, since last July.
The ONS data found that in the year to April average house prices rose by the greatest margin in Wales, up 15.6 per cent to £185,000. This was followed by England, up 8.9 per cent to £268,000.
In Scotland prices rose 6.3 per cent annually to £161,000, and Northern Ireland, up 6.0 per cent to £149,000.
For the fifth month on the trot, London had the lowest annual growth – 3.3 per cent. Amongst the other English regions, the North East saw the strongest growth at 16.9 per cent.
Experts are divided over how to interpret the reduced price growth.
PropTech entrepreneur and market analyst Anthony Codling says: “The data relates sold house prices, so the small reduction, in my view, will have reflected prices agreed by those who thought they might miss the March Stamp Duty Holiday deadline. Following the stamp duty holiday extension, I expect the house price data over the coming months show more ups than downs.”
Jeremy Leaf, north London estate agent and a former RICS residential chairman, comments: “The historic nature of these numbers, though the most comprehensive available, is likely to mean the small fall in monthly prices is a response to the anticipated end of the stamp duty holiday in March before they resume their upward trajectory following extension of the concession. Looking forward, our experiences on the ground tell us that market activity is set to continue at similar levels at least for the next few months, although increasing sales instructions will result in some price softening rather than a correction.
Karen Noye, mortgage expert at wealth management firm Quilter, states: “This may be the first signal of what is to come as it is likely buyers no longer feel that they can complete on a property before the June stamp duty holiday tapering and are exiting the buying market in response. The inflated house prices we have seen over the past year are linked to all the government schemes put in place to keep the market motoring during the pandemic so it is only natural that prices will drop as these schemes disappear.”
Meanwhile Nick Leeming, chairman of Jackson-Stops, adds: “Although the market has cooled ever so slightly following the mad rush at the start of the year, we still saw 13 buyers chasing every instruction across our branches in April. These buyers are very unlikely to meet the government’s stamp duty deadline and are proof that the market will remain strong during the second-half of the year, after the incentive has ended.”