UK

House prices dropped in April amid higher mortgage rates

mortgage rates

It was the first month-on-month drop since August, after a flat September and six successive rises

UK house prices dropped month-on-month in April, according to the country’s biggest building society Nationwide, reversing the recent rebound.

The average price across the UK was £261,962. It was the first month-on-month drop since August, after a flat September and six successive rises. That was still 0.6% higher year-on-year.

It comes after mortgage rates edged back up in the late winter and early spring, as markets readjusted to central banks’ “higher for longer” tone after an exuberant price-cutting to start the year.

The rises appeared to continue in recent weeks, with lenders including Santander and NatWest raising rates recently. That may put more downward pressure on house prices.

Robert Gardner, Nationwide’s Chief Economist, said: The slowdown likely reflects ongoing affordability pressures, with longer term interest rates increasing in recent months, reversing the steep drop seen around the turn of the year. House prices are now nearly 4% below the all-time highs recorded in the summer of 2022, after taking account of seasonal effects.

Michelle Lawson, director at mortgage broker Lawson Financial, said the market would not truly recover until the BoE cuts its base rate.

She said: Increasing mortgage rates have injected uncertainty into the market over the past month or so. Though there is still demand, we need a base rate cut and a Stamp Duty incentive to kickstart the market and get things moving again. Also, a General Election needs to be called sooner rather than later. The absence of a date for the General Election is adding to the caution.

Disclaimer: The opinions expressed by our writers are their own and do not represent the views of Invest for Property. The information provided on Invest for Property is intended for informational purposes only. Invest for Property is not liable for any financial losses incurred. Conduct your own research by contacting financial experts before making any investment decisions.

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