Agents returned from the Easter break to the news that house prices rose 1.6% in the year to March.
Figures from Nationwide showed prices rising more quickly than the 1.2% annual increase recorded in February.
But it wasn’t all good news, as prices fell 0.2% compared to the previous month, following a 0.7% rise in February.
Best performing
Northern Ireland was the best performing region, with annual prices up 4.6%. While the South West was the weakest, with prices down 1.7%.
Meanwhile, data from the Bank of England showed mortgage approvals for house purchases rose from 56,100 in January, to 60,400 in February.
Robert Gardner, Nationwide’s Chief Economist, says: “Activity has picked up from the weak levels prevailing towards the end of 2023, but remain relatively subdued by historic standards.
“This largely reflects the impact of higher interest rates on affordability. While mortgage rates are below the peaks seen in mid-2023, they remain well above the lows prevailing in the wake of the pandemic.”
If these trends are maintained, activity is likely to gain momentum.”
Gardner says there are some good signs though, with new buyer enquiries picking up.
“If these trends are maintained, activity is likely to gain momentum, though the pace of the recovery is still likely to be heavily influenced by the trajectory of interest rates,” he says.
INDUSTRY REACTION
Matt Thompson, head of sales at Chestertons, says: “In March, the property market witnessed steady demand from buyers although some house hunters decided to pause their search in the hope for major incentives to be announced in the Spring Budget.
“As this wasn’t the case, the majority of these buyers have since resumed their property search. As a result, March concluded the first quarter of the year with a busy property market – particularly in the capital where demand continues to outstrip supply.”
Tom Bill, Head of UK Residential Research at Knight Frank, says: “House prices have risen marginally but the direction of travel for the UK market has been sideways so far this year.
“Demand will be unleashed once there is a more permanent drop in mortgage rates and that requires fewer mixed signals around inflation and a rate cut to appear firmly on the horizon.”
Jeremy Leaf, north London estate agent and a former RICS residential chairman, says: “Though only a modest rise, we again see the housing market demonstrating its resilience, bearing in mind these figures do not include cash purchases which make up around 40 per cent of the total.
“Price movements are important, especially in such a long-established report, as they have a significant impact on buyer confidence,” he says.
“We are finding in our offices that prices are fairly steady, mainly down to hard bargaining and more choice than any big change one way or the other.”
Tomer Aboody, Director of MT Finance, says: “Another rise in house prices underlines the confidence being felt in the market.
“Stable interest rates, more favourable mortgage rates than this time last year and less than half the inflation, are persuading buyers that it is time to make their move as the traditionally busier spring market picks up,” he says.
“All-important transaction numbers are also rising, albeit from a low base, demonstrating increased confidence among buyers that the worst of the uncertainty and market turmoil may be behind us.”
Guy Gittins, Foxtons CEO, says: “The UK property market has well and truly sprung into action in recent months and we’ve seen a notable uplift in the volume of sales enquiries, viewings requests and the number of offers being submitted.
“It’s fair to say that the green shoots of positivity seen since the closing stages of last year are blossoming and this is helping to cultivate positive house price growth,” he says.
“Higher mortgage rates do remain a concern for many buyers and will continue to influence the price they are able to pay to a degree.”
Ed Phillips, Lomond CEO, says: “Slowly but surely, the UK property market is responding to the overarching air of stability that has developed since interest rates have been held at 5.25%.
“While we’re yet to see any notable jump in property values just yet, market momentum is building, with a firm foundation now laid to facilitate further growth as we head into what is traditionally the busiest time of year.”
Marc von Grundherr, Director of Benham and Reeves, says: “As we approach the spring selling season a very marginal decline in the monthly rate of house price growth should be viewed as nothing more than the market pausing for breath before the floodgates open.
“The real measure of market health is the annual rate of growth and a 1.6% jump demonstrates that we are very much heading in the right direction, and it’s full steam ahead for the remainder of the year.”
Jason Harris-Cohen, CEO of Open Property Group, says: “The market has continued to tiptoe forward in 2024 as buyers look to make their move.
However, while the outlook is positive for the year ahead, sellers will need to remain patient,” he says.
“Not only will the higher cost of borrowing continue to prove problematic, but an uplift in market activity is also likely to increase fall through frequencies, while also delaying the time it’s taking to sell.”
Verona Frankish, CEO of Yopa, says: “The appetite of the nation’s homebuyers may have been dampened by higher mortgage rates, but it certainly hasn’t disappeared, as demonstrated by the improvements seen in mortgaged approved house prices seen in recent months.
“With the seasonal spring surge in market activity also imminent, it’s only a matter of time before we see the UK property market shift up a gear with respect to both sales volumes and house price growth.”
Mark Harris, CEO of mortgage broker SPF Private Clients, says: “What happens next with mortgage rates could have a significant impact on property market activity and ultimately house prices.
“Buyers and sellers have been more active since the start of the year as it looks as though base rate has peaked, and the next move in rates will be downwards,” he says.
“However, affordability is still an issue for many, thanks to many consecutive rises in base rate before we got to this point, along with the elevated cost of living, particularly energy costs and food.”
Nathan Emerson, CEO of Propertymark, says: “Sellers have every reason to start feeling positive about putting their home up for sale and being able to go on to buy their next perfect property.
“2024 has shown a positive trend that house prices are growing once again following three years of economic turbulence,” he says.
“However the UK Government must look to make houses equally affordable for buyers and that can only be done by building more houses,” he says.
“Propertymark’s own Housing Insight Report found there has been an 80 per cent increase in the number of new properties becoming available, ultimately making it easier for people to consider a move.”
Anthony Codling, MD of Equity Research at RBC Capital Markets, says: House prices nudged down in March by 0.2% on a seasonally adjusted basis, but with wage growth ahead of house price growth housing affordability is improving.
“On an annual basis house prices were up 1.6%, but there is evidence of a North-South divide with house prices rising in the North and softening in the South,” he says.
“However, overall, we view house prices as stable, and stability is what the housing market needs in our view. Stable conditions will encourage more people to move home, and the level of housing transactions is on the up.”
