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Home prices fell 0.4% in April, 4% below the all-time high set in summer 2022, according to the Nationwide Home Price Index.
The growth rate is still increasing year by year, increasing by 0.6% compared to the same month last year.
Some first-time buyers seem to be hoping that prices will drop before they buy a property. Half of prospective buyers (49%) say they have postponed their purchase plans in the past 12 months, and 53% say they are putting off buying due to high home prices. 41% due to rising mortgage interest rates.
Sarah Coles, head of personal finance at Hargreaves Lansdown, said: “Rising house prices and higher mortgage rates mean first-time buyers are facing the worst of it.”
“This means those who were optimistic earlier this year that a rate cut was imminent are becoming increasingly frustrated.
“Also, the market doesn’t expect a rate cut until August or September, so things don’t get any easier for now, but we can’t completely rule out June.”
“Also, with only two or three rate cuts expected this year, we won’t see any major changes in mortgage rates.”
The average house price is £261,962.
The two-year average repair cost to the end of April was 5.83% in April, up from 5.56% in January, according to data from Moneyfacts.
Jeremy Leaf, a north London estate agent and former RICS housing chairman, said: “I’m not surprised by the small fall in property prices. The increase in the number of listings means more options for buyers and more intense negotiations on the ground. It has been proven that only realistic sellers are successful.
“However, consistent with a strong spring market, underlying demand is much more resilient than it was a few months ago. Despite the relatively modest recent increase in mortgage payments, inflation is more subdued.” We believe that affordability will improve.”
Tomer Aboudi, director of property finance company MT Finance, said: “The decline in house prices is said to be driven by a lack of affordability for buyers and uncertainty around interest rates and inflation. We need stability and support.”
“Whether this is through lower interest rates, greater mortgage flexibility or potential stamp duty reform, buyers need to have confidence that they can commit to buying and moving.
“Property prices are down, but to put this into context they are only 4% below their 2022 peak. This means property prices remain high and often out of reach. That means more inventory needs to come to market, and we need to encourage potential sellers to move to keep prices down.”