UK house prices fall for first time in 6 months, Halifax data shows

LONDON (Reuters) -British house prices fell 1.0% in March, their first drop since September 2023, figures from mortgage lender Halifax showed on Friday, leaving prices 0.3% higher than a year earlier.

Economists polled by Reuters had forecast a monthly rise of 0.1% and an annual increase of 1.45%.

Halifax director Kim Kinnaird said the drop was “not entirely unexpected” after price rises in the previous five months.

“Financial markets have also become less optimistic about the degree and timing of Base Rate cuts, as core inflation proves stickier than generally expected. This has stalled the decline in mortgage rates that had helped to drive market activity around the turn of the year,” she added.

Bank of England data on Tuesday showed February had the highest number of mortgage approvals since September 2022, while separate March data from Nationwide Building Society showed house prices had risen by 1.6% over the past year.

Financial markets currently expect the BoE to start cutting rates in June or August, and for rates to fall to around 4.5% by the end of the year from 5.25% now.

(Reporting by David Milliken; editing by William James)