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Halifax confirms North-South divide – with price falls down South

House prices are showing falls in the South of England, though growth is still positive in the North as well as Northern Ireland, Halifax’s house price index has revealed.

Properties in Eastern England recorded the biggest decline of -1.1%, with homes selling for an average of £329,723, a drop of £3,541 over the last year.

Tom Bill, head of UK residential research at Knight Frank, said: “House prices continue to move sideways as higher mortgage rates hit market momentum.

“As the prospect of the first rate cut since March 2020 drifts further into the distance, borrowing costs have edged higher and budgets have been squeezed.

“A short-lived burst of positivity in the early weeks of this year led to higher supply, increasing downwards pressure on prices.

“A wave of homeowners currently rolling off sub-2% mortgages is adding to the financial pressures in the system.

“As a summer rate cut moves onto the horizon, we expect UK house prices to respond and rise by 3% in 2024.”

London & North West

London remains the most expensive region in the UK to buy a home, with an average price of £539,336.

However prices in the capital have been relatively flat over the last year, up by just +0.1%.

The North West saw the greatest increase in England, rising by 3.3% annually to £231,599.

Amanda Bryden, head of mortgages, Halifax, 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.

“Our recent research also found that buyers are adjusting their expectations, with first-time buyers in particular compensating for higher borrowing costs by targeting smaller properties.

“We see this reflected in property prices for the first few months of this year, with the value of flats rising most sharply, closing the ‘growth gap’ on bigger properties that’s existed for most of the last four years.

Northern Ireland

Northern Ireland is the fastest growing region of the UK in terms of house prices, Halifax’s house price index has revealed.

Prices in Northern Ireland now cost an average of £192,502, rising by 3.4% in April year-on-year.

This still represents a reduction from the growth rate of 4.1% recorded in March.

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