Market Analysis

In March, British house prices recorded a 1.0% decline, marking the first decrease since September 2023, according to data released by mortgage lender Halifax. Despite this drop, prices remained 0.3% higher compared to the previous year.

Experts surveyed by Reuters had anticipated a marginal monthly increase of 0.1% and a year-on-year growth of 1.45%.

Kim Kinnaird, director at Halifax, noted that the decline wasn't entirely unexpected, given the consistent price hikes over the preceding five months. 

Kinnaird also pointed out that financial markets have adjusted their expectations regarding Base Rate cuts, as core inflation has proven to be more persistent than initially anticipated. This adjustment has resulted in a halt in the decline of mortgage rates, which had been a driving force behind market activity earlier in the year.

Recent Bank of England data indicated that February witnessed the highest number of mortgage approvals since September 2022. Additionally, separate figures from Nationwide Building Society for March showed a 1.6% increase in house prices over the past year.

Financial markets are currently anticipating rate cuts from the Bank of England to commence in either June or August. There's an expectation for rates to decrease to approximately 4.5% by the end of the year, down from the current rate of 5.25%.

Paraphrasing text from "Investing UK" all rights reserved by the original author.