According to the Halifax, house prices edged a little firmer in April. Having fallen a slightly shallower revised 0.9 percent in March, prices edged up 0.1 percent on the month, a tick short of the market consensus but their sixth increase in the last seven months. With base effects also positive, the annual inflation rate climbed from 0.4 percent to 1.1 percent and average prices remain well above their pre-pandemic levels.

Still, the 3-monthly change - the best guide to underlying developments eased further, from 2.0 percent in the first quarter to 0.8 percent, a 5-month low. Market activity has strengthened and prices are still trending higher but at a reduced rate. The recent increases in mortgage rates announced by a number of the larger lenders seems to be having some impact. Prices continued to be supported by rising demand and a resilient labour market but affordability constraints and a generally more cautious view of how quickly borrowing costs will fall could well see little overall change over the next few months.

Today's data compare with the 0.4 percent monthly fall already reported in the Nationwide survey but both reports show a similar underlying trend in prices. The UK RPI now stands at minus 4 and the RPI-P at 10. Very mild overall economic underperformance remains wholly attributable to the surprising weakness of prices in general.

Having surprisingly fallen in March, prices are seen staging a partial rebound with a 0.2 percent monthly rise in April.

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.