House prices see biggest monthly fall for eight years

House prices saw their sharpest drop since 2010 in April, according to Halifax’s latest House Price Index, falling by 3.1% following a 1.6% rise in March. The average price of a property in the UK is now £220,962, the bank said. Despite the drop, prices in the three months to April were still 2.2% higher than in the same three months a year earlier. Although house prices can be volatile in the short-term, Halifax said that a strong UK labour market combined with wage growth picking up should help relieve some of the current pressure on household finances. As a result, the bank exfpects annual house price growth will remain in its forecast range of 0-3% this year. However, according to Halifax’s latest Housing Market Confidence Tracker, optimism in the housing market remains at a five-year low, although the majority of consumers do believe house prices will increase over the next 12 months. There is still a limited supply of homes for sale. Property sales fell by 7.2% to 92,270 between February and March, Halifax said, the lowest level since May 2016. The number of mortgages approved to finance house purchases fell by 1.4% in March, according to Bank of England figures, although approvals in the three months to March were 1.7% higher than in the previous quarter.Nationwide reports higher pricesNationwide’s latest House Price Index paints a more positive picture, with the building society reporting a 0.2% increase in prices in April. It said that the average price of a property in the UK is currently £213,000. Annual house price growth rose to 2.6% in April, up from 2.1% in March. Nationwide expects prices to rise by around 1% over the course of the year. Robert Gardner, chief economist at Nationwide, said: “Looking ahead, much will depend on how broader economic conditions evolve, especially in the labour market, but also with respect to interest rates. Subdued economic activity and the ongoing squeeze on household budgets is likely to continue to exert a modest drag on housing market activity and house price growth this year.” The building society pointed to a recovery in first-time buyer transactions in recent years, helped by government schemes such as Help to Buy, although it said that home mover activity remained “relatively subdued” partly due to a limited supply of available properties.