House prices recorded their sharpest month-on-month decline for nearly eight years in April, according to lender Halifax.
Prices fell by an unexpectedly steep 3.1% compared with March in the latest sign of weakness in the property market and wider consumer slowdown.
Halifax cautioned that the figure, the biggest drop since September 2010, partly reflected monthly volatility after a month-on-month rise of 1.6% in March.
But on a three-month basis the market also saw a decline, with February-April average prices down 0.1% on the preceding period.
Compared with a year ago, prices in April were 2.2% higher, a slowdown compared to the 2.7% growth recorded in March.
Halifax managing director Russell Galley said: “Housing demand has softened in the early months of 2018, with both mortgage approvals and completed home sales edging down.”
But he added that housing supply remained low while wage growth was finally picking up.
“These factors should help to ease pressure on household finances and as a result we expect annual price growth will remain in our forecast range of 0-3% this year.”
Jeremy Leaf, a north London estate agent and a former residential chairman of the Royal Institution of Chartered Surveyors (RICS), said: “We are entering what is supposed to be the busy spring buying season, which tends to set the tone for the rest of the year.
“More recently, activity and listings have picked up but we are finding the market still quite sensitive and only those prepared to negotiate hard are moving on.”
Howard Archer, chief economic advisor to the EY ITEM Club, said: “The housing market is clearly currently struggling to gain traction and we suspect that any meaningful upturn will remain elusive over the coming months.
“We expect house price gains over 2018 will be limited to a modest 2%.”
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The weaker than expected data comes two days ahead of the Bank of England’s interest rates decision.
The Bank is widely expected to keep rates on hold after official figures showed the economy slowing to a crawl in the first quarter of 2018, while business surveys from April suggested there had been a sluggish start to the second quarter.
Source: Sky