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UK house prices fell 0.4% month-on-month in April, new data from Nationwide shows.
Figures also showed the annual rate of change slowed to 0.6% from 1.6% in March.
heading | April 24th | March 24th |
---|---|---|
Monthly index* | 520.9 | 523.1 |
Monthly fluctuation* | -0.4% | -0.2% |
annual change | 0.6% | 1.6% |
average price
(not seasonally adjusted) |
£261,962 | £261,142 |
*Seasonally adjusted figures (note that the monthly rate of change will be revised if the seasonal adjustment coefficient is re-estimated)
Industry reaction:
Tom Bill, head of UK housing research at Knight Frank, commented: “The rise in house prices seen in the first two months of this year is reversing as rising mortgage rates hit demand. A strong labor market has dwarfed the prospect of rate cuts and raised borrowing costs. ”
Nicky Stephenson, managing director of Fine & Country, said: “The property market remains very volatile, with prices rising slightly one month and falling the next.
“Demand continues to recover steadily due to an increase in mortgage approvals, but the economy remains fragile.
“Uncertainty over the Bank of England’s benchmark rate decision has led some major financial institutions to raise mortgage rates, which could have a short-term impact on consumer confidence.
“However, the real estate market has proven incredibly resilient in recent years, with buyers and sellers alike proving highly adaptable to the high interest rate environment.
“Sellers are much more open to negotiation and there is a steady pipeline of homes coming to market, but both factors are likely contributing to the slight decline in home prices.
“A reduction in the benchmark interest rate will help cement confidence in the housing market and economy, and we look forward to such an announcement soon.”
Sam Mitchell, CEO of Purplebricks, commented: “There is still positive sentiment from buyers, with an increase in viewing activity indicating stability in the housing market. Some banks have increased mortgage rates slightly, but there is also an increase in new-to-market products. The Bank of England has just announced that mortgage approval rates are at record levels, and people will want to take advantage of this. .
“It’s even harder for buyers in the south of England, as relatively high rents and stamp duty, as well as inflation, make it very difficult for first-time buyers to save up a down payment and get on the property ladder. But it’s even more difficult for buyers in the south of England. , this trend, combined with the continued preference for working from home, has led to increased activity in rural areas with better transport links to cities and more affordability.”
Ian McKenzie, CEO of the Property Professionals Guild, said: “Another modest decline in house prices shows that the growth seen earlier this year is unsustainable.
“The rising cost of living continues to force households to control their spending, while also making it more difficult for first-time buyers to save for a down payment.
“Sellers shouldn’t be surprised if buyers are asking for more flexibility on price. If you’re in a hurry to sell, you may run into offers well below the asking price.
“It’s always worth seeking advice from your local estate agent to see what kind of support they can offer you. Research and see what prices have been paid for properties in your neighborhood over the past year and evaluate wisely. please.
“House price growth may be slowing, but that doesn’t mean demand for quality housing is diminishing. On the ground, people looking to escape the expensive rental market are We’re seeing more potential buyers coming in.
“More attractive mortgage products will help first-time buyers get the keys, but new developments in providing more buying incentives as well as encouraging the construction of more new homes will help first-time buyers get the keys into hand. It really takes a lot of determination.
“The coming months will depend on whether affordability concerns subside, but summer tends to be a busy season for the real estate industry, so prices could rise as market activity picks up. be.”
Matt Thompson, Head of Sales at Chestertons, said: “The increase in market activity that normally accompanies spring was slightly delayed this year, but became more pronounced towards April. An increase in the number of house hunters in London compared to March also helped sellers However, as demand continued to outstrip supply in April, the majority of sellers had the upper hand in price negotiations.”
Anthony Codling, head of European housing and building materials research at RBC Capital Markets, said: “House prices fell for the second month in a row in April as rising mortgage rates began to take effect. The rise in mortgage rates was small but enough to derail the plans of homebuyers on the margins. However, we don’t expect housing prices to fall significantly this year, because it is the people who can buy, not the people who can’t, that determine the price of housing, so the volume of housing transactions will be more significant than housing prices. And mortgage approvals and housing transactions are trending up, not down.”
Jonathan Hopper, CEO of Garrington Property Finders, commented: “In just a few months, house prices have gone from recovery to reversal.
“New year price increases now seem like a thing of the past, after Nationwide data showed average prices falling in both March and April.
“There are two things behind the market turn-on prices. The first is that mortgage rates are heading in the wrong direction. Average borrowing costs are now higher than they were at the beginning of the year. This makes many prospective buyers hesitant.
“According to Nationwide research, 41% of prospective first-time buyers have put their plans on hold because mortgage costs are too high, and this pattern is being repeated across markets.
“Secondly, there is an oversupply of homes for sale in many regions. The flurry of activity seen at the beginning of the year opened the floodgates for many would-be movers who had put their homes on the market. .
“The current surge in supply, combined with volatile demand from buyers whose affordability is stretched to the limit by persistently high mortgage rates, is driving prices down in many parts of the country.
“Conversely, buyers who are less reliant on mortgage debt now feel they are in a great position. In many areas, there is plenty of choice and it is a buyer’s market, which means careful planning and If you negotiate, you may be able to get a significant discount on the home you want.
“Mortgage rates are likely to remain high for some time yet, as the Bank of England is not expected to reduce the benchmark rate until next month at the earliest.
“Spring should be a booming time for the real estate market. However, the combination of weak demand and abundant supply is likely to keep prices down and favor buyers who can move forward with their purchases.”
Kate Steer, property critic for finder.com, said: “Uncertainty about when the Bank of England will cut interest rates, and by how much, is holding back demand. Buyers continue to struggle with affordability issues, with several large financial institutions increasing in the past week. With millions of borrowers planning to refinance this year, it’s clear the market is still adjusting to the end of ultra-low mortgage deals.
“Buyer demand remains subdued and as a result house prices have fallen slightly. Much will depend on Bank of England action in the coming months. However, Half of the experts think we will have to wait a little longer to see a rate cut. ”
James Briggs, Head of Brokerage Sales at Together, said: “The recent fall in house prices has created a further gray cloud over the normally busy spring period, with the effects of previous volatility lingering. There are also concerns that the Bank of England is not in a position to cut interest rates until August. is on the rise, and some buyers may pause their real estate plans in the short term.
“However, there will still be a sizeable group of people who are in a position to move forward. For those who need to raise capital quickly, or who are stuck waiting to sell an existing property, bridging loans are a good option. can be a good option. Many aspiring homeowners are also taking their first steps onto the property ladder using schemes such as Right to Buy and Shared Ownership. It is always good to speak to a mortgage advisor who can advise you on your financing options.”
The annual growth rate of house prices is expected to slow in April.