House Prices Ease before Affordability Improves

House prices have dipped for the first time in five months according to the latest Halifax House Price Index out today, although they are still at a higher level than last year.

Halifax reported that average house prices fell by -1.0% in March on a monthly basis, following an increase of +0.3% in February.

On an annual basis, however, property prices continued to show remarkable resilience and grew by an albeit modest 0.3%.

The average home in the UK now stands at £288,430.

Andrew Montlake, MD of Coreco mortgage brokers commented, “House prices can be fickle, but after several months of rises it was no surprise that house prices finally fell slightly, reflecting tougher economic conditions and the fact that interest rates have not yet eased significantly.

“Over the past 12 months house prices have however proved to be remarkably resilient, and despite this monthly fall, there is a tidal surge of pent-up demand waiting to break the dam at the first sign that interest rates are finally reducing.

“When this happens house prices may well bounce back quickly, and we have already seen buyers return to the market keen to look for deals before the recovery comes.”

Affordability Improvements

One thing that will help the market, especially where buyers are concerned, is the change to National Insurance contributions coming into effect from 6^th April.

This is more than likely to influence lender’s affordability calculators, which could see the amount those looking for a mortgage can borrow increasing.

Andrew Montlake, MD of Coreco mortgage brokers commented, “Affordability calculations have been a thorn in many a buyer’s side over the past eighteen months and any easing of this which allows buyers to borrow more will be much welcomed.

“With the changes in National Insurance having a direct effect on incomes, we will see many lender’s affordability models adapt to increase the level of borrowing available to anyone looking for a mortgage and they may find that next week they can borrow a little bit more than they can today from the same lender.”

Whilst the differences are not going to be huge, potentially around the £10,000 to £15,000 level, it is this type of knowledge that sets mortgage brokers apart and can be the difference between being able to obtain the dream home or not.

If you want to learn more and speak to one of our friendly, down-to-earth mortgage experts about how much you can borrow, please click here or contact us on 020 7 220 5110.