Average UK house prices rose 0.1% month on month in April, an improvement on a fall of 0.9% in March, after house prices “largely plateaued” in the early part of the year, according to the latest index from Halifax.

Property values grew by 1.1% annually (Photo: sirtravelalot/Shutterstock)

Property values were up 1.1% year on year in April, accelerating from a 0.4% rise the previous month.

The average UK home price was £288,949 in April, up from £288,781 in March, Halifax said.

Halfax head of mortgages Amanda Bryden said: “Activity and demand is improving, evidenced by greater numbers of mortgage applications so far this year, while at an industry level, mortgage approvals have reached their highest point in 18 months.”

Bryden added that buyers were adjusting their expectations, with first-time buyers compensating for higher borrowing costs by targeting smaller properties.

“But we can’t overlook the fact that affordability constraints are still a significant challenge for both new buyers and those rolling off fixed-term deals,” she added.

“Mortgage rates have edged up again in recent weeks, primarily as a result of expectations around future Bank of England base rate changes, with markets now pricing in a slower pace of cuts.

“If, as is still expected, downward moves in bank rate come into play later this year, fixed mortgage rates should fall.”

Bryden also said that she expected property prices to “rise modestly” this year.

Foxtons chief executive Guy Gittins added: “Although UK homebuyers continue to wait patiently for interest rates to fall, this has not dampened the growing level of market confidence that has been building since the start of the year. Many buyers are already pressing ahead with plans to purchase, with hopes of mortgage rate reductions on the horizon.

“Since a hold on interest rates in September, mortgage approvals have been climbing, there’s been an uplift in viewings and more offers are being made, so it’s clear both buyers and sellers are responding favourably to a greater degree of market stability.

“This bodes very well for the year ahead and we only expect conditions to improve further as spring turns to summer and these initial offers reach completion.”

Jason Tebb, president of property website OnTheMarket, said: “While prices have picked up slightly after March’s dip, buyers remain sensitive as to what they are prepared to pay and perceive themselves to be in a good negotiating position.”

EY chief economist Peter Arnold added: “There is growing evidence that the housing market has passed the bottom. The substantial fall in mortgage rates since last summer, combined with strong growth in nominal wages, has reduced the scale of the mortgage affordability problem.

“This has helped to entice some buyers back to the market, leading to a recovery in transactions and putting a floor under prices.”