According to the Halifax, house prices fell in April for the first time this year. A 0.3 percent monthly drop was well wide of the market consensus and trimmed annual house price inflation from 1.6 percent to just 0.1 percent, its weakest outturn since December 2012.

The quarterly change, the best guide to underlying developments, now stands at 1.3 percent, up sharply from minus 0.4 percent in the first quarter and minus 3.5 percent in the three months to January. This was its first positive reading since the three months ending October 2022 and suggests that despite rising BoE interest rates, the market is holding up surprisingly well. Regionally the picture was mixed with annual falls in the South East (0.6 percent) and London (0.2 percent) contrasting with gains elsewhere.

The Halifax's findings compare with a surprisingly large 0.5 percent monthly increase in the Nationwide's measure but both lenders' reports show a clear loss of momentum versus the first half of last year. More generally however, today's update puts the UK ECDI at 25 and the ECDI-P at 30, both gauges showing overall UK economic activity still outperforming market expectations by some distance.

Prices are expected to rise 0.3 percent on the month after a 0.8 percent bounce in March.

The Halifax House Price Index (HPI) is the UK's longest running monthly house price measure with data covering the whole country going back to January 1983. The index is based on the largest monthly sample of mortgage data, typically covering around 15,000 house purchases per month, and covers the whole calendar month. In March 2016 Markit announced that it would be acquiring the Halifax HPI from Lloyds Banking Group. Halifax continues to publish the index on behalf of Markit and both the name and the basic methodology remain unchanged. However, in May 2020, the annual growth measure was changed from the average of the last three months to just the latest month.

Home values affect much in the economy - especially the housing and consumer sectors. Periods of rising home values encourage new construction while periods of soft home prices can damp housing starts. Changes in home values play key roles in consumer spending and in consumer financial health. During the first half of this decade sharply rising home prices boosted how much home equity households held. In turn, this increased consumers' ability to spend, based on wealth effects and from being able to draw upon expanding home equity lines of credit.