Analysis of movement in house price indices

Each month, Halifax, Nationwide and HM Land Registry publish house price indices, tracking the movement in average house prices in the UK. Halifax and Nationwide updates are based on mortgage approvals data, while the UK HPI is a joint production by HM Land Registry, Land and Property Services Northern Ireland, ONS and Registers of Scotland.

Cautious optimism remains with average house price movement

Annual movement in UK house prices was up in March 2024, according to both Halifax and Nationwide’s indices.

Halifax reported a 0.3% annual increase in house prices, while Nationwide’s index showed an increase of 1.6% on the same period.

On a monthly basis, Halifax said prices were down by 1.0% on February 2024, while Nationwide’s index showed a 0.2% decrease.

Kim Kinnaird, Director at Halifax Mortgages, said a monthly fall after five consecutive months of rises was not entirely unexpected given the sharp increase of interest rates beginning in 2022, but that house prices were showing ‘surprising resilience’.

She said, however: ‘The housing market remains sensitive to the scale and pace of interest rate changes and, with only a modest improvement in affordability on the horizon, this will likely limit the scope for significant house price increases this year.’

Nationwide’s Chief Economist, Robert Gardner, said that ‘activity has picked up from the weak levels prevailing towards the end of 2023 but remains relatively subdued by historic standards’.

He added: ‘With cost-of-living pressures easing as inflation moves back towards target, consumer sentiment is improving. Indeed, surveyors report a pickup in new buyer enquiries and new instructions to sell in recent months.’

The UK HPI, with the latest data for February 2024, showed a 0.2% drop in house prices compared with February 2023, and a 0.4% increase on January 2024. As the UK HPI figures cover house sales that may have been agreed months previously, there tends to be a lag in the data.

^{Source: Halifax (Methodology), Nationwide (Methodology), UK HPI (Methodology)}

^{Source: Nationwide}

Karl Horton, Chief Data Officer at BCIS said: ‘The Bank of England’s decision to maintain the base rate at 5.25% for the fifth consecutive time means borrowing rates remain high for both consumers and developers.

‘Affordability is crucial to both supply and demand and the latest construction output data shows the impact of this. Private housing new work was down by 16.1% in February compared with the previous year, and we’re forecasting it to decrease overall by 7% in 2024 before returning to growth in 2025.’

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