Nationwide Building Society said average house prices were up 0.4% to £278,880, extending March’s 0.9% gain, which itself had been the largest rise since 2024

UK home values unexpectedly strengthened in April, according to one of the country’s largest lenders, suggesting the housing market remained resilient even as the Iran war pushed up mortgage rates.

Nationwide Building Society said average house prices were up 0.4% to £278,880, extending March’s 0.9% gain, which itself had been the largest rise since 2024. April’s increase also defied a 0.3% decline expected by economists.

Later on Friday, Bank of England data showed demand for mortgages holding up in the first month of the Iran war, perhaps as households rushed to get ahead of increases in borrowing costs. The number of home loans approved by banks and building societies increased to a four-month high of 63,531 in March, up from 62,708 in February.

The reports suggest home-buyers have been relatively unfazed by a jump in borrowing costs, after the Middle East war replaced hopes of interest-rate cuts with fears rates may need to rise to manage the threat posed by resurgent inflation. The BOE voted to keep the benchmark rate on hold on Thursday, but officials signalled they may need to turn to rate rises over the summer if energy disruptions continue.

On an annual basis, house prices were up 3%, picking up pace from last month, Nationwide said.

The market is likely being supported by the relative strength of household finances, Robert Gardner, Nationwide’s chief economist, said. In aggregate, household debt is at its lowest level relative to income for around two decades, and sizeable savings buffers have been built up in recent years.