House prices rise after seven months of falls

House prices rise after seven months of falls

9:19 AM, 2nd May 2023, About 12 months ago

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The UK’s house prices rose 0.5% in April – after seven consecutive months of prices falling, Nationwide reports.

The lender says that on an annual basis, prices fell 2.7% in the year to April – but that is a slight recovery from last month’s figure of 3.1%.

Nationwide says that the average house price is currently £260,441, which is still nearly 5% below last August’s peak of £273,751.

‘Tentative signs of a recovery’

Robert Gardner, Nationwide’s chief economist, said: “While annual house price growth remained negative in April at -2.7%, there were tentative signs of a recovery with prices rising by 0.5% during the month.

“Recent Bank of England data suggests that housing market activity remained subdued in the opening months of 2023, with the number of mortgages approved for house purchase in February nearly 40% below the level prevailing a year ago, and around a third lower than pre-pandemic levels.”

He added: “While confidence remains subdued by historic standards, people’s views of their own financial position over the next 12 months, and general economic conditions in the year ahead, have both improved markedly in recent months.

“If inflation falls sharply in the second half of the year, as most analysts expect, this would likely further bolster sentiment, especially if labour market conditions remain strong.”

‘One swallow doesn’t make a summer’

Sarah Coles, the head of personal finance at Hargreaves Lansdown, said: “House prices have recovered very slightly, with the spring bump pushing them into positive territory after sliding for seven months. It’s an encouraging sign for the market, but one swallow doesn’t make a summer.”

She added: “The uptick in prices was foreshadowed in mortgage approval data, when approvals for new purchases started to pick up very slightly in February, so we were expecting more sales in the spring.

“It owes a fair amount to renewed confidence that the horrors of inflation could be coming to an end, and that mortgage rates will continue to fall.”

‘House prices are holding up well’

Jeremy Leaf, a north London estate agent and a former RICS residential chairman, said: “This generally reliable survey, though only based on Nationwide‘s own customers’ experiences, reveals house prices are holding up well despite continuing worries about mortgages and inflation.

“Not only are lenders being cautious, but buyers are also ensuring they have sufficient resources, not only to cover repayment, improvement and other costs, as well as getting the best property deal they can before taking the plunge.”

Tomer Aboody, a director of property lender MT Finance, said: “With interest rates looking to hopefully stabilise and with the Prime Minister’s ambitious plan to cut inflation in half by the end of the year, buyers are finally making their move after months of waiting and stalling.

“More transactions are definitely needed for the overall strength of the housing market, however, which may require further intervention from the government in the form of restructuring stamp duty.”

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