Home prices rise, retail sales hit by wet spring

Demand for homes continues despite inflationary pressures (pic: Terry Murden)

UK house prices continue to edge up in spite of higher mortgage costs, according to new data from Halifax.

Average prices edged up by 0.1% in April, following a fall of 0.9% in March. Annual house price growth also accelerated, increasing 1.1% in the 12 months to April, an improvement on the 0.4% recorded the previous month. 

Alice Haine, personal finance analyst at Bestinvest by Evelyn Partners, the wealth manager, said: “While a return of house price growth is positive, the market remains volatile as challenges persist for buyers and those looking to refinance.”

She said iInterest rates have been on pause at a 16-year high of 5.25% since August last year, a factor causing considerable uncertainty in the mortgage market.

“A rate cut at this week’s Monetary Policy Committee meeting appears unlikely, with rate setters likely to stick to the ‘higher for longer’ mantra for now as they wait for concrete evidence that inflationary pressures really have eased.  

“The uncertainty does not appear to be deterring buyers, however, who are ploughing into the property market in droves.”

Retail sales hit by wet weather

UK Total retail sales fell by 4% year on year in April, against a growth of 5.1% in April 2023., though the figure was distorted by the early Easter.

When correcting for the holiday weekend, the average growth for March and April together was up 0.2%.

However, Helen Dickinson, chief executive of the British Retail Consortium, said: “Dismal weather and disappointing sales led to a depressing start to Spring for retailers, even accounting for the change in timing of Easter.”

Scotland’s retailers fared worse than the UK average with a similar fall for April but a March-April fall of 2%.

David Lonsdale, director of the Scottish Retail Consortium, said: ” “Notwithstanding the Easter distortion, the figures do underline the sense that any recovery in consumer demand and retail sales is at best fitful and fragile.

“That said, there are some grounds for cautious optimism. Recent reductions in employee national insurance contributions and the freeze in council tax should hopefully support demand over the months ahead, especially with shop price inflation at its lowest level for two and a half years and average wages growing in real terms.

“Hopefully, this summer’s major sporting events including the European football championships and Olympics will also provide a welcome fillip to retail, more so if the Scottish football team and Team GB have something to celebrate.” 

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