Vendors starting to realise ‘their homes aren’t worth as much as they thought’

UK house prices fell again in April, as growing uncertainty and affordability constraints continue to have an impact on buyers across the market, amid broadening evidence of a slowdown in the UK property market.

Very few experts were surprised to see the average property fall in value last month, with the latest figures from Halifax revealing that prices dropped by 0.1% in April compared with March. But many homeowners preparing to sell their homes are only now starting to discover that UK property prices are on a downward trend, according to Jonathan Harris of mortgage broker Anderson Harris.

He said: “The issue for buyers is affordability and bridging the huge gulf between incomes and house prices. We are seeing a number of down valuations from surveyors as caution starts to become more prevalent.

“Vendors are beginning to appreciate that their homes aren’t worth as much as they thought.”

According to Halifax, the average price of a home in the UK fell to £219,649 in April from £219,788 in March, which is almost £2,500 below the all-time peak of £222,190 reached in December 2016.

The annual rate of price inflation remained at 3.8% in April, Halifax said, the lowest rate for four years.

But the fall in house prices is “not necessarily a bad sign” for the UK housing market, according to Jeremy Duncombe of the Legal & General Mortgage Club.

He said: “What remains unchanged is the staggering gap between house price inflation and wage inflation.

“Tackling our nation’s housing shortage needs to be at the top of the agenda for all political parties.”

While acknowledging that housing demand appears to have been curbed in recent months due to a deterioration in housing affordability “driven by the sustained period of rapid house price growth during 2014-16”, Martin Ellis, Halifax housing economist, believes that cheap borrowing rates and an acute shortage of homes on the market is likely to put a floor under property prices.

“A continued low mortgage rate environment, combined with an ongoing acute shortage of properties for sale, should nonetheless help continue to underpin house prices over the coming months,” he said.


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Written by: Houseladder