Home prices dropped in the quarter to February as Halifax reports, which proves what seemed as a cooling market after the latest interest rate hike by the BoE and the nearing Brexit.
The company’s fresh report shows that prices declined by 0.7% in the quarter, while there were no cases of decrease since May 2017 with the 0.2% fall. Prices rose by 1.8% year-over-year, down from 2.2% of January, becoming the lowest growth rate since March 2013.
Home prices in Britain were adding 10% on a yearly basis before the Brexit referendum, which took place in the middle of 2016, Halifax data shows. The BoE upped interest rates for the first time in a decade last November, lifting borrowing rate to 0.5% from previous 0.25%.
Even a slight growth of mortgage rates in the past several months has harmed the market considerably, and the expiry of the BoE’s special programme for lenders started after Brexit referendum called the Term Funding Scheme would probably drive up mortgage more, Samuel Tombs of Pantheon says.
Mortgage rates rise is going to have the strongest impact on the market, pushing down demand and making sure that home prices keep at the previous level in 2018, he also says.