House prices tick lower amid geopolitical uncertainty

(Sharecast News) - House prices ticked lower in April, industry data showed on Friday, as mounting geopolitical uncertainty weighed on consumer sentiment at home.

According to Halifax, house prices edged down 0.1% last month, adding to March's 0.5% decline. The average property price now stands at £299,313.

Annual growth slowed to 0.4% from 0.8% in March.

Amanda Bryden, head of mortgages at Halifax, said: "After a strong start to the year, recent global developments have added a greater degree of uncertainty to the outlook. In particular, higher energy prices have fed into inflation expectations, prompting markets to reassess the path for interest rates, a shift that has already pushed up borrowing costs for many buyers.

"This understandably leads to more caution among some households, with the cost of living once again front of mind and extra thought being given to planned property moves."

The outbreak of war in the Middle East at the end of February has sent global energy prices soaring, reigniting inflation fears and dampening interest rate expectations. Prior to the first US attacks on Iran, the Bank of England had been widely expected to cut Bank Rate this year as inflation continued to track towards its long-term 2% target.

Instead, it has now left the cost of borrowing on hold twice, and most analysts are now predicting rates will rise this year. Inflation has also edged higher to 3.3%.

However, Bryden said that overall, the housing market remained resilient. "While activity is likely to cool in the near term, the underlying picture remains one of relative stability, supported by wage growth that continues to outpace house price inflation."