Nationwide survey indicates UK house prices stabilising


UK house prices rose by 0.5% in April after falling for seven consecutive months, Nationwide reveals in its latest house price survey.

The figures add weight to the argument that the property market has stabilised after the 2022 mini-budget fiasco.

The average house price remained 4% below its peak in August last year which was before former Prime Minister Liz Truss and her chancellor Kwasi Kwarteng briefly sent debt markets into turmoil by announcing plans for large-scale unfunded tax cuts.

Nationwide’s latest survey shows that compared with April last year, the average house price is down by 2.7%.

Nationwide’s chief economist Robert Gardner expects a sharp slowing of inflation later this year and combined with a recent improvement in consumer confidence surveys he believes this could support a modest recovery in the housing market.

“But any upturn is likely to remain fairly pedestrian, as it will take time for household finances to recover,” Gardner says.

Former RICS residential chairman Jeremy Leaf, believes the 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, 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.’

SPF Private Clients, chief executive of mortgage broker business Mark Harris says: ‘Average property prices fell again in April but not as far as in March as the spring market gets into gear and buyers and sellers start to see an end in sight with regard to high inflation and interest rates”.

He adds: “Swap rates, which underpin the pricing of fixed-rate mortgages, have risen again on the back of short-term volatility. However, lenders continue to reduce their fixed rates, albeit at a slower pace than before, with bigger reductions seen on higher loan-to-value mortgages as they try to attract first-time buyers.”

MT Finance director Tomer Aboody suggests that 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.”

Together head of introducers Scott Clay argues that with inflation sitting stubbornly in double digits, those hoping to move this year may pump the brakes in the short-term while the market improves.

“Buyers on the other hand, if they have deposits ready or support from the Bank of Mum and Dad, may find they can snap up deals at low-rate prices – but they’ll need to move quickly”.

He concludes:  “With the next interest rate decision next week, all eyes will be watching for how the market reacts and whether any concrete stability is in store. Those who may be concerned or unsure the best route to move forward with their mortgage and property plans are best to seek specialist lenders who can consider your personal and financial circumstances more flexibly.”

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