The average price paid by first-time buyers in the UK has fallen to its lowest level so far this year, according to data from Halifax. The lender reported that annual house price growth halved in April compared to March, as rising living costs continue to weigh on household confidence.
Halifax's latest house price index showed a 0.1% month-on-month decline in average UK house prices in April, following a 0.5% drop in March. This brought the typical property value to £299,313. The annual growth rate for a standard home slowed sharply to 0.4% in April, down from 0.8% in March.
The softening in price growth may offer a glimmer of hope for prospective first-time buyers, with Halifax noting that the average price paid by those entering the market has dipped to £238,908, its lowest point this year.
Market resilience amid uncertainty
Amanda Bryden, head of mortgages at Halifax, commented: "After a strong start to the year, recent global developments have added a greater degree of uncertainty to the outlook. In particular, higher energy prices have fed into inflation expectations, prompting markets to reassess the path for interest rates – a shift that has already pushed up borrowing costs for many buyers."
She added: "This understandably leads to more caution among some households, with the cost of living once again front of mind and extra thought being given to planned property moves. Even so, the housing market continues to display the resilience that has been its hallmark in recent years."
Bryden noted that while activity is likely to cool in the near term, the underlying picture remains one of relative stability, supported by wage growth that continues to outpace house price inflation. She also highlighted that most existing homeowners are on fixed-rate mortgages, insulating them from short-term interest rate changes.
"A slower pace of house price growth may be disappointing news for existing homeowners. However, for those looking to step onto the property ladder, stable prices are helpful, even if higher mortgage rates mean affordability remains stretched," she said.
Regional variations
Across the UK, Northern Ireland leads annual house price growth, with average prices rising 7.6% over the past year. Scotland also recorded strong growth, with a 4.0% annual increase. In Wales, house price growth continued to slow, with an annual rise of 0.7%.
In England, stronger price growth remains concentrated in northern regions. The North East saw prices rise by 4.5% over the year, while the North West recorded annual growth of 3.4%. In contrast, London experienced a 1.4% decline, and the South East saw a 2.0% drop.
Average house prices and annual change by region (Halifax)
- East Midlands: £246,997, +0.6%
- Eastern England: £333,457, -0.7%
- London: £536,051, -1.4%
- North East: £183,445, +4.5%
- North West: £248,945, +3.4%
- Northern Ireland: £224,851, +7.6%
- Scotland: £222,448, +4.0%
- South East: £383,044, -2.0%
- South West: £300,758, -1.1%
- Wales: £230,952, +0.7%
- West Midlands: £265,713, +2.0%
- Yorkshire and the Humber: £216,915, +1.0%
Expert perspectives
Sarah Coles, head of personal finance at AJ Bell, advised caution: "If you’re considering pausing a purchase in the hope that prices keep dropping, it’s worth bearing in mind that future movements in the market are never guaranteed. While prices have fallen this month, the Bank of England figures show mortgage approvals for purchases rose in February and March, so we could still see this feed through into an uptick in buyers and rising prices again."
Karen Noye, mortgage expert at wealth manager Quilter, urged buyers not to try to time the market: "For buyers and those approaching remortgage, the message is not to try to call the bottom of the market. The more practical point is that mortgage pricing could move quickly in either direction, so borrowers should review options early and be ready to act if lenders reprice."
Mark Harris, chief executive of mortgage broker SPF Private Clients, said first-time buyers should be encouraged: "First-time buyers will be encouraged as house prices remain steady rather than soar."
Nathan Emerson, chief executive officer of Propertymark, highlighted the impact of inflation: "The rate of inflation remains a key concern for many people, especially as there is widespread speculation that the Bank of England may potentially need to implement measured base rate increases over the coming months to best regulate potential future financial instability."
He added: "There will likely be a sense of anxiety across the summer months, especially for those with tracker mortgage products, and with mortgage deals that are due to expire. It will be important for people to investigate what new mortgage products might be available to them and to make plans to help navigate around any increased expenditures."
