House price growth slows in April but remains in double digits: Nationwide

Prices rose 0.3% month-on-month, with the average house price now at £267,620.

Robert Gardner, Nationwide's chief economist, said: “Annual house price growth slowed modestly to 12.1% in April, down from 14.3% in March – nevertheless, this is the 11th time in the past 12 months that the annual growth rate has been in double digits. Prices rose by 0.3% month-on-month, after taking account of seasonal effects – the ninth successive monthly increase, though this is the smallest monthly gain since September last year.

“Housing market activity has remained solid with mortgage approvals continuing to run above pre-Covid levels. Demand is being supported by robust labour market conditions, where employment growth has remained strong and the unemployment rate has fallen back to pre-pandemic lows. With the stock of homes on the market still low, this has translated into continued upward pressure on house prices.

“Nevertheless, it is surprising that conditions have remained so buoyant, given mounting pressure on household budgets which has severely dented consumer confidence. Indeed, consumers’ expectations of their own personal finances over the next twelve months has dropped to levels last seen during the depths of the global financial crisis more than a decade ago. Moreover, housing affordability has deteriorated because house price growth has been outstripping income growth by a wide margin over the past two years, while more recently borrowing costs have increased (though they remain low by historic standards)."

Tomer Aboody, director of MT Finance, commented: "The continued shortage of properties for sale is continuing to push up prices as buyers are still seeking space or feeling a change is needed.

"With interest rates on the up, buyers are rushing to secure a mortgage now before further increases are implemented. As rates rise and inflation increases, a lack of confidence is likely to start to filter through, leading to a slow calming of the market in coming months."

Emma Cox, MD of real estate at Shawbrook, added: “The property market is entering unchartered territory. After more than a decade of low-interest rates we now find ourselves in a high inflationary environment with relatively low wage growth. Expectations that the Bank of England will once again have to raise interest rates could influence consumer confidence and play on the minds of prospective buyers who need to lock in a competitive mortgage rate in order to take their next step.

“But poor supply levels are insulating sellers and will continue to do so, especially in traditional hotspots. The return to city centres after a two-year hiatus and the demand for more face to face interactions again could reignite the UK’s love affair with cities such as London. The staycation and second home boom in seaside towns also remains steadfast, making quaint British towns a top priority for buyers too. 

“The acid test for the market will be the run up to summer. Traditionally a hive of activity, sellers will be hoping for current transaction levels and price growth to prevail. Current expectations are that house prices will be shielded from current pressures for the remainder of 2022, with reality perhaps starting to bite in 2023 if current market conditions persist.”