House prices in the last three months were 2.2% higher than in the preceding three months, the Halifax said.
The quarterly rate of change decreased for the first time this year following three consecutive rises and compares with 2.6% last month.
Prices in the three months to April were 8.5% higher than in the same three months a year earlier. This was slightly higher than March’s 8.1% but kept the annual rate within the narrow range of 8-9% where it has been throughout the past seven months with the exception of December (7.8%). The annual rate remains below the recent peak of 10.2% in July 2014.
House prices increased by 1.6% between March and April.
Martin Ellis, the Halifax’s housing economist, said: “House prices in the three months to April were 2.2% higher than in the preceding three months. This measure of the underlying rate of house price growth fell for the first time in 2015 following three successive rises. In contrast, annual house price growth increased slightly, from 8.1% in March to 8.5%. Nonetheless, the annual rate remains in the narrow range of 8-9% where it has been since the start of 2015 and is below last July’s peak of 10.2%.
“Housing demand is being supported by a number of factors including economic improvement, rising employment and low mortgage rates. At the same time, supply remains very tight with a general shortage of properties available for sale. This combination has kept house price inflation steady in recent months with prices increasing by 2.2-2.6% on a quarterly basis and at an annual rate of 8-9%.
“House prices are continuing to increase more quickly than average earnings despite the return to real earnings growth over the past few months. The resulting rise in the level of house prices in relation to earnings should constrain house price growth and activity over the remainder of the year. The annual rate of house price growth is forecast to end the year at 3-5%.”
