Analysis of movement in house price indices

Each month, Halifax, Nationwide and HM Land Registry publish house price indices, tracking the movement in average house prices in the UK. Halifax and Nationwide updates are based on mortgage approvals data, while the UK HPI is a joint production by HM Land Registry, Land and Property Services Northern Ireland, ONS and Registers of Scotland.

House price movement still impacted by affordability concerns

Annual movement in UK house prices was up in April 2024, according to both Halifax and Nationwide’s indices. 

Halifax reported a 1.1% annual increase in house prices, while Nationwide’s index showed a smaller increase of 0.6% on the same period. 

On a monthly basis, Halifax said prices were up by 0.1% on March 2024, while Nationwide’s index showed a 0.4% decrease. 

Amanda Bryden, Head of Mortgages at Halifax, attributed the 1.1% annual increase to weaker price growth 12 months ago. She said average house prices have ‘largely plateaued’ so far in 2024. 

She said: ‘This reflects a housing market finding its feet in an era of higher interest rates. While borrowing costs remain more expensive than a few years ago, homebuyers are gaining confidence from a period of relative stability. Activity and demand is improving, evidenced by greater numbers of mortgage applications so far this year, while at an industry level mortgage approvals have reached their highest point in 18 months.’ 

Nationwide’s Chief Economist, Robert Gardner, said that the slowdown compared with last month ‘likely reflects ongoing affordability pressures, with longer term interest rates rising in recent months, reversing the steep fall seen around the turn of the year.’ 

The UK HPI, with the latest data for March 2024, showed a 1.8% increase in house prices compared with March 2023, and a 0.7% increase on February 2024. As the UK HPI figures cover house sales that may have been agreed months previously, there tends to be a lag in the data.

^{Source: Halifax (Methodology), Nationwide (Methodology), UK HPI (Methodology)}

^{Source: Nationwide}

Karl Horton, Chief Data Officer at BCIS said: ‘The Bank of England’s decision to maintain the base rate at 5.25% for the sixth consecutive time at its May meeting means borrowing rates remain high for both consumers and developers. 

‘Affordability is crucial to both supply and demand and the latest construction output data shows it’s an uneven road to recovery. Private housing new work was up by 3.5% in March compared with a wet February, but down by 10.6% on an annual basis. We’re forecasting it to decrease overall by 7% in 2024 before returning to growth in 2025.’ 

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