UK house price growth rises to 3% – Nationwide

Annual UK house prices rose by 3%, up from 2.2% in March, while prices increased by 0.4% month on month after seasonal adjustment, Nationwide data reveals.

The lender put the average UK house price at £278,880 in April, compared with £277,186 a month earlier.

Robert Gardner, Nationwide’s chief economist, said: “Despite the uncertainty caused by developments in the Middle East and the subsequent rise in energy prices, the UK housing market has continued to regain momentum following the slowdown recorded around the turn of the year.

“This is somewhat surprising given that indicators of consumer confidence have weakened noticeably.”

Helped by strong finances

He continued: “The market is likely being supported by the relative strength of household finances.

“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, although these have not been evenly distributed across households.”

Mr Gardner added: “Moreover, housing affordability had been improving steadily in recent years due to a combination of income growth outpacing house price growth by a wide margin and a modest decline in mortgage rates.

“While market interest rates have risen in recent months, the impact on affordability has so far been limited.”

Housing sector reaction to Nationwide house price index

Nathan Emerson, the CEO of Propertymark, said: “While the latest Nationwide house price index shows house prices continuing to edge upwards, this reflects a market still heavily influenced by constrained supply rather than a sharp surge in demand.

“Stock levels remain limited across many areas, meaning even modest levels of buyer activity can translate into upward pressure on prices.”

Marc von Grundherr, a director of Benham and Reeves, said: “Whilst house price growth has picked up to 3% annually, performance so far this year has remained relatively modest, which reflects a market that is moving forward, but without the urgency seen in previous years.

“However, this shouldn’t detract from the underlying strength of the market.”

Verona Frankish, the CEO of Yopa, said: “Despite the rate of monthly house price growth slowing, property values remain higher than both this time last month and when compared to this time last year.

“This highlights just how strong the UK property market is when you consider the wider economic landscape, not to mention global turbulence.”

Tom Bill, the head of UK residential research at Knight Frank, said: “The impact of rising mortgage rates on house prices will be more gradual than sudden as offers that pre-date the conflict work their way through the system, which is why we have downgraded our price forecasts for this year marginally.

“Borrowing costs have been volatile in recent weeks, underlining the high degree of uncertainty that exists over how long the war lasts, to what extent it escalates and the impact of second round effects on inflation.”

Jeremy Leaf, a north London estate agent and a former RICS residential chairman, said: “Write the housing market off at your peril.

“Another market survey – this time from the country’s largest building society – shows prices holding up better than we’d dared hope, particularly of houses, bearing in mind continuing uncertainties about the cost of living, including mortgages.

“Although the data covers the period up to the first month of the war in Iran, perhaps before it became apparent hostilities would become more protracted, we are finding on the ground realism is starting to prevail.”