House prices rose by 1.5% in March, according to Halifax, bringing the average cost of a property in the UK to a record high of £227,871.
This followed a rise of just 0.5% in February, although the bank said that monthly changes could be volatile. House prices in the first three months of 2018 were 2.7% higher than in the same period last year, although they were -0.1% lower than in the preceding three months.
A continuing shortage of properties is expected to support price growth going forward, with low mortgage rates also helping. According to Halifax, mortgages are at their most affordable for a decade. It expects house price growth to remain at around 3% over the coming months.
In contrast, Nationwide’s latest house price index found that prices fell by 0.2% in March, with the average price of a property currently at £211,625. The building society said annual UK price growth remained broadly stable at 2.1%, down slightly from the 2.2% recorded in February.
Like Halifax, Nationwide said that a lack of available properties would continue to hold up house prices, although the ongoing squeeze on household budgets combined with subdued economic activity is likely “to continue to exert a modest drag” on price growth.
Slight narrowing of North-South divide
Property prices in many Southern regions slowed or fell, according to Halifax’s regional breakdown of house prices, whilst many Northern regions fared much better.
The East Midlands and East Anglia recorded the strongest rates of annual price inflation, Halifax said, with house prices rising in these areas by 7.3% and 7.2% respectively. They were closely followed by Scotland and Yorkshire and Humberside, which registered increases of 6.7% and 6.1%.
In contrast, London recorded its sharpest fall in annual house prices since the start of 2011, with prices down by 3.8%. The South East registered only a small 0.3% annual increase in prices, whilst the South West saw prices rise by just 1.9%.
Looking at the first three months of the year, prices in London declined by 3.2% compared to the final three months of 2017, whilst the South East and the South West saw declines of 1.5% and 1.1% respectively.
Quarterly increases were highest in the North of England and East Anglia, where prices rose by 4.5% and 2.2% respectively. Despite falling prices in the capital, the average price of a home in London stands at £430,749, compared to £146,648 in the North of England.
House prices reach record high in March