House prices dipped by 1.1 per cent in March, according to the latest Halifax House Price Index. However, this is not presumed to be a sustained decline, with a lack of stock and general volatility thought to be behind the dip.
Monthly house prices figures can be volatile so it would be premature to read too much into this fall in prices in March. Over three months, prices continued to rise so this could well be just a blip.
Lenders still expect a rise in demand in the second quarter of this year, according to the Bank of England credit conditions survey. Although the Mortgage Market Review (MMR) will be introduced later this month, most are already compliant with the new rules so this shouldn’t be too much of an upheaval.
Most lenders are preparing to do more lending this year than last, which suggests that any dip in lending now is not the beginning of a sustained decline.
Halifax believes rising house prices will enable homeowners to move up the property ladder as they take advantage of greater equity, freeing up their homes and creating more movement in the market.
The lack of stock coming to the market is the real issue slowing everything down, with buyers competing at frenzied open houses and on sealed bids. New homes are being built but they simply can’t be built quickly enough.