London property prices rose just 1.3% to an average of £543,346 in a subdued market during the year to April latest figures show today.
The data from Britain’s biggest mortgage lender Halifax come ahead of an expected quarter point cut in interest rates from the Bank of England to 4.25%.
Most mortgage lenders have already reduced their headline fixed rates to below 4% in anticipation of further cuts from the Bank later this year.
According to Halifax, nationally the average price rose by 0.3% in the month to an average of £297,781 , compared with a 0.5% fall in March, while the annual rate of growth went up to 3.2% , from 2.9% in March.
Amanda Bryden, head of mortgages, at Halifax, said: “We know the stamp duty changes prompted a surge in transactions in the early part of this year, as buyers rushed to beat the tax-rise deadline. However, this didn't lead to a significant increase in property prices, with the last six months characterised by a stability in prices rarely seen since the pandemic.
“While the market has cooled slightly since this rush, buyer activity remains strong in comparison to recent years. “Mortgage rates have continued to fall, with most lenders now offering rates below 4%. Coupled with positive earnings growth that has outpaced broader inflation, these factors have helped to steadily improve affordability for many buyers.
“Overall, the market continues to show resilience despite a subdued economic environment and risks from geopolitical developments. There is likely to be a bump-up in consumer price inflation as household bills increase, but with further base rate cuts also expected, we anticipate a similar trend of modest price growth this year."
Tom Bill, head of UK residential research at Knight Frank, said: “Demand has increased as more mortgage rates drop below 4%, which will underpin prices while the momentum is maintained. Tariff turbulence has helped push interest rate expectations lower but buyers could be put off if it gets too bumpy. “Inflation caused by new measures such as higher employer national insurance costs remains a risk, which means rates could start heading in the wrong direction again. For now, demand remains solid, especially in needs-driven markets.”
This article was written by Jonathan Prynn from The Evening Standard and was legally licensed through the DiveMarketplace by Industry Dive. Please direct all licensing questions to legal@industrydive.com.