Despite challenges with affordability and higher borrowing costs, UK house prices have seen a slight increase as reported by Halifax for April 2024, contrasting with a decline observed by Nationwide.
UK house prices are seeing a modest rise despite challenges with affordability and higher borrowing costs. In April 2024, Halifax reported a slight increase of 0.1% in house prices, following a 0.9% decline in March. The annual growth was recorded at 1.1%, with the average house price standing at £288,949. This contrasts with Nationwide’s findings, which noted a 0.4% decline in April.
The increase in prices is largely attributed to more mortgage approvals and a shift in first-time buyers opting for smaller properties due to rising borrowing costs. Amanda Bryden from Halifax noted a marked increase in demand and activity within the market, pointing to an 18-month high in mortgage approvals, particularly notable during a period when flat prices began to rise more than those of larger properties.
Concurrently, fewer Londoners are moving to the countryside, a reversal from the trend spurred by the pandemic when nearly half sought homes outside the capital. This change is linked to a resurgence in city living, driven by a return to office mandates and the re-opening of London’s entertainment venues. Property market data indicates a preference shift back towards urban living, with the capital’s homes increasingly likely to sell above asking price.
In the broader UK business landscape, energy company BP reported a profit decrease in Q1 2024 to $2.7 billion, down from previous forecasts due to weaker oil and gas trading and lower profit margins. Despite this, BP has initiated a $1.75 billion share buyback program. The financial markets have shown positive signs as well, with the FTSE 100 reaching a new intraday high of 8311 points.
Further, Saudi Aramco has reported a 14.4% drop in first quarter net profit, attributed to lower oil prices and reduced volumes sold.
Overall, the UK housing market demonstrates resilience amid changing economic conditions and varying market demands, trending towards a modest improvement forecasted for 2024 by Halifax. The outlook remains cautiously optimistic, influenced by affordability challenges and potential interest rate changes by the Bank of England.
