01 May 2024
If you are covering the latest Nationwide house price index, please see the following comment from Karen Noye, mortgage expert at Quilter:
“The lack of momentum in the housing market appears to be having a knock-on effect on house prices. Nationwide’s latest house price index reveals house prices fell 0.4% month on month in April, while the annual rate of change also slowed to 0.6% down from 1.6% in March.
“House sales typically pick up in the spring, but ongoing affordability pressures appear to be dampening this trend this year. Given many lenders have upped their mortgage rates in recent weeks, we can expect this to continue and could see it translate into a further dip in house prices in the shorter term. Yesterday’s UK monthly property transactions data evidenced a continued stall in sales, and though we saw a minor 1% uptick in seasonally adjusted residential property transactions in March compared to February, rising to 84,200, this was still 6% lower than the level of transactions seen in the same period last year.
“Though the housing market is suffering a relatively subdued period at the moment, it may not last for too much longer as we could see a turning point during the summer months which could buoy house prices. The Bank of England is expected to announce its first interest rate cut later this year given inflation has continued making progress back down towards the Bank’s 2% target, falling to 3.2% in March. The prospect of a cut could translate into lower mortgage rates which could make moving home or taking the first step onto the property ladder more affordable and thus more attractive to prospective buyers who have been stuck in ‘wait and see’ mode.
“Despite the lull in house prices at present, the outlook for the housing market is starting to look a little more optimistic, particularly if the Bank of England cuts rates sooner rather than later. For those who are looking to purchase a property this year, it is important to seek professional mortgage advice to ensure you make the best possible decisions for your circumstances.”
