House prices rose 1.1% in April despite interest rate hikes

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The rise can be attributed to strength among prospective sales of the country’s most expensive homes

Average asking prices for UK homes increased 1.1% in April, reaching £372,324 despite a period of prolonged pressure on potential buyers from higher interest rates.

The average monthly rise of £4,207 is in line with the 10-year average for this time of year, per property website Rightmove’s monthly house price index. The average price for a property coming to market for sale is now just £570 shy of May 2023’s record of £372,894, while the annual rate of price growth rises to 1.7%, the highest level for 12 months.

The rise can be attributed to strength among prospective sales of the country’s most expensive homes, according to Rightmove. The so-called “top-of-the-ladder” sector saw its strongest price growth since 2014.

While some buyers, across all sectors, will feel that their affordability has improved compared to last year due to wage growth and steady house prices, others will be more impacted by cost of living challenges and high mortgage rates, said Tim Bannister, Rightmove’s director of property science.

The market remains very price-sensitive, operating at different speeds across its many segments and areas, with prices and sales activity increasing more slowly in the more mortgage-dependent, mass-market first-time buyer and second-stepper sectors, the property website added.

The number of new sellers coming to the market is up by 12% compared to this time a year ago, and the number of sales being agreed is up by 13% as both seller and buyer activity bounce back from last year’s much more subdued spring.

The top end of the market is considerably surpassing the average, with new sellers was up by 18% compared with last year, and the number of sales being agreed was 20% higher.

The moves come as bets ramp up on UK interest rate cuts, with forecasters at EY Item Club looking to a decline of 75 basis points this year, with the first reduction to come in June.

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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