Annual house price growth at 10.9% in April

House prices rose at a slower rate in April, but a short supply of properties for sale is maintaining upward pressure on them, according to new figures.

Halifax's April House Price Index shows property prices increased by 1.1 per cent during the month, which is the smallest monthly rise so far this year.

Annual house price growth stayed in double digits, although fell from 11.1 per cent in March to 10.9 per cent in April, with a typical home in the UK now costing £196,745.

Halifax said that housing demand is being underpinned by good economic and employment conditions, with property prices on track to record the 60th consecutive quarter of growth this quarter.

Meanwhile, market conditions reached their tightest level for nearly three years as "healthy" demand combined with a shortage of properties for sale to boost prices - good news for buy-to-let investors seeking capital appreciation.

However, chief economist Martin Ellis commented: "Negative real earnings growth and the increase in interest rates since last August ... are expected to exert increasing pressure on householders' finances, resulting in slowdown in house price inflation over the coming months."

Recent research from Young Group found that 88 per cent of landlords expect interest rates to remain below six per cent this year and 83 per cent plan to buy additional investment property in the next 12 months.

Landlord Mortgages “A lot of our successful landlords are coming to the end of three year discount and fixed Buy To Let Mortgages. We are arranging remortgages for them but at the same time raising capital to fund more Buy To Let purchases. Whilst capital appreciation is predicted to be lower in future years this is not deterring the landlord, he or she sees no reason to leave money in a property. Therefore, it is prime time to pull out the money as he or she may have to wait a further three years before pulling out further money i.e. being locked into a another Buy To Let Mortgage deal.”

House prices had a slower rise in April this year, the second slowest since July 2006. Prices rose is April by l.l% bringing the average price of a UK home to £196,745 but this may be proof of a slowing of the market.

Prices are still rising because of the demand for houses and the lack of properties on the market.

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