UK property prices rose 1.5% in March, average house price hits £227,871

UK property prices rose by 1.5% in March compared to the previous month, with the average price of a British house hitting £227,871, according to the Halifax House Price Index.

It was the biggest monthly gain since August and comes after the 0.5% increase in February.

UKhousepricegrowthMarchIn the three months to March 2018, UK house prices were 2.7% higher compared to the same three months last year, up from an annual increase of 1.8% seen in February.

However, compared to the previous quarter, prices in the first quarter of 2018 were down by 0.1% compared to the previous three months (October-December 2017), the second consecutive decline on this measure.

Halifax forecasts price growth to remain close to its prediction of 3% as a continuing shortage of homes for sale is expected to support price growth.

Russell Galley, Managing Director, Halifax, said:

“House prices in the three months to March were largely unchanged compared with the previous quarter. The annual rate of growth continues to be in a narrow range of under 3%; though the average price of £227,871 is a new high.

“Activity levels, like house price growth, have softened compared with a year ago. Mortgage approvals are down compared to 12 months ago, whilst home sales have remained flat in the early months of the year. This lack of direction in the housing market is in stark contrast to the continuing strength of the UK jobs market. The unemployment rate is now the joint lowest since 1975 and in the three months to January there were 402,000 more people in work compared to a year earlier.

“In the coming months we expect price growth to remain close to our prediction of 3% despite the very positive factors of continuing low mortgage rates, great affordability levels and a robust labour market. The continuing shortage of properties for sale will also support price growth.”

Howard Archer, chief economic adviser at EY Item Club, commented on the how UK property prices had “surprisingly spiked” in March.

He said: “The Halifax surprisingly reported house prices spiked 1.5% month on month in March…

“The March spike in house prices reported by the Halifax does not change our view that 2018 will be a difficult year for the housing market. We still expect price gains over the year will be limited to a modest 2%.”

London suffering severe slowdown in price growth, according to Hometrack data 

The Halifax price growth data comes following a separate report by Hometrack (part of the Zoopla property group) which revealed that house price growth in London recently dropped to a seven-year low. Prices in the UK capital dropped in nearly half of the cities postcodes (42% of postcodes).

The Hometrack price index for London slowed to just 1.0% (the lowest annual rate of growth since August 2011), down from 4.3% last year. The consultancy predicts year-on-year house price growth in London to be negative by the middle of 2018.