UK house price growth forecast halved as Iran war fallout hits housing market

UK house prices fell for a second consecutive month in April, as Halifax halved its estimate for the annual rate of growth due to the conflict in the Middle East. Halifax, which is part of Lloyds – Britain’s biggest mortgage lender – said that the cost of a typical UK home fell by 0.1% in April, to £299,313. This followed a 0.5% fall in March. Halifax said the annual rate of house price growth had slowed to 0.4% from 0.8%. 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.” On Thursday, the average two-year fixed mortgage rate stood at 5.77%, up from 4.83% at the start of March, according to Moneyfacts. The average five-year fixed rate mortgage was 5.69%, up from 4.95%. Prior to the start of the conflict in the Middle East the UK housing market had shown solid growth this year, with the price of an average home rising 0.8% month-on-month in January and 0.3% in February. The strong start to the year had led Halifax to forecast 1.2% house price growth on an annual basis in February. …