House prices dip in April

House prices fell back by 0.6% in April, according to the latest figures from the Halifax, which said it expects further “headwinds” to prices in the coming months.

The mortgage lender said the average selling price of a house fell to £238,511 in April, the first full month of the coronavirus lockdown, representing a drop of 0.6% on the previous month. However, this figure is still a rise of 2.7% on April 2019.

Halifax said in its monthly house price index that the lack of transactions in the marketplace given the lockdown was making it very difficult to calculate average house prices, and would likely lead to considerable “volatility” in reported prices in the months ahead.

Russell Galley, the managing director of the Halifax, said this mean that it will not be until after lockdown restrictions are eased that we will get a sense of the temporary “new normal” conditions for the housing market. He said: “The future remains uncertain and based on our current forecasting we expect short term headwinds to house prices, although we maintain our underlying confidence in the health of the housing market in the longer term.”

Mortgage approvals for house purchases fell considerably in March with just 56,000 loans issued, a drop of 24%, with data for April expected to show further falls.

After announcing the coronavirus lockdown the government issued guidance which effectively put a stop to all but “critical” home moves. With prime minister Boris Johnson expected to announce an easing of lockdown restrictions on Sunday, surveyors and house builders have been working closely with government to draw up detailed guidance allowing house moves to be conducted in a socially distanced manner which allows the home-moving guidance to be relaxed.

While many housebuilders have announced plans to re-open sites, they are thought unlikely to attempt to return to full production until they can easily sell the homes they produce.

It is not yet clear whether home moving will be one of the areas of the economy in which restrictions are relaxed in the first wave of measures designed to ease the lockdown.

The house price figures came as the government revealed data showing the sales of new homes under the Help to Buy equity loan scheme hit a record level last year. The government said 52,207 homes were sold under the scheme in 2019, marginally above the previous record of 52,132 from 2018, and amount to more than one in every five new homes.

The tally takes the total number of homes sold under the scheme, in which the government takes a 20% equity stake in a new house purchase in lieu of a large deposit, to 263,297. The scheme has now helped finance purchasers worth more than £70bn since 2014, with over £15bn of loans created.