Shock house price rise boosts capital appreciation fo...

Against expectations, the average UK house price increased by 0.5 per cent last month following seven consecutive falls, according to the Nationwide Building Society.

Although the Nationwide’s annual house price growth figure remained negative last month - with prices 2.7 per cent below April 2022 - this was also an improvement on the annual price drop of 3.1 per cent reported in March.

The average UK house price in April was £260,441, Nationwide says.

Robert Gardner, Nationwide's chief economist, says: “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 per cent below the level prevailing a year ago, and around a third lower than pre-pandemic levels.

“However, in recent months industry data on mortgage applications point to signs of a pickup.

“This also chimes with the recent shifts in consumer sentiment. 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.

“This, in turn, would also be likely to support a modest recovery in housing market activity.

“But any upturn is likely to remain fairly pedestrian, as it will take time for household finances to recover, since average earnings have been failing to keep pace with inflation, and by a wide margin over the last few years. Mortgage interest rates are also likely to act as a headwind. While they are well below the highs seen in the wake of the mini-Budget last year, rates are still more than double the level prevailing a year ago

“Nevertheless, if gains in nominal incomes remain solid (wage growth has been running at above 7% in the private sector), this, together with weak or declining house prices, will help improve housing affordability over time, especially if mortgage rates continue to trend lower.”

Sarah Coles, head of personal finance at business consultancy Hargreaves Lansdown, comments: “It’s an encouraging sign for the market, but one swallow doesn’t make a summer.

“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.

“ … If inflation drops back fairly swiftly after April this may well creep higher as people can see light at the end of the tunnel. Meanwhile, mortgage rates have continued trending downwards. Moneyfacts figures show that averages wavered slightly in the wake of the surprise inflationary rise in March and the subsequent rate hike, but more recently they have started inching south again.

“However, there are no guarantees, and while this can inspire hope among buyers, it can’t secure any certainty, so it’s too early to call the bottom.”

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Andy Marshall
04 May 2023 09:37 AM

I'm surprised by this report and take with a pinch of salt. However, like these 2 I am selling at least 2 further properties.
I expect prices to stabilise, but to go up hmmm.
I will still hold off to sell mine end of year beginning of 2024 though. I believe the Autumn budget will be bountiful, the tories will do everything they can to try and convince voters to vote them back in!!!!!!
Just to add spoke with mortgage brokers and they told me hardly any new lending to private BTL Landlords, a few 1st time buyers and most are re-mortgages due to fixed rates coming to an end. I joked that they must be more like counsellors these days to which I was told a lot of people were in for a shock!