Recent falls in UK house prices

Mortgage couple

Nationwide’s House Price Index has reported a fall in house prices of 0.4% in April, following a fall of 0.2% in March. The annual rate of growth in house prices has fallen to 0.6% from 1.6% in March.

Nationwide adjusts its monthly index to remove seasonal effects, (for example house prices tend to be higher during spring and summer), to show more clearly the trend in prices.

The average house price, which is not seasonally adjusted, rose to £261,962 from £261,142.

Robert Gardner, Nationwide’s Chief Economist, said that house prices were now about 4% below the all-time highs of summer 2022.

Research commissioned by Nationwide had found that the cost of living had altered the purchase plans of over 80% of first-time buyers. High house prices and recent increases in mortgage costs were key reasons why first-time buyers had delayed their purchases.

Will mortgage rates fall soon?

Mortgage rates had been falling for several months from late 2023 on the anticipation of a cut in the Bank Rate by the Bank of England. When that did not materialise, rates increased again.

The Consumer Prices Index (CPI) rose by 3.2% in the 12 months to March 2024. Although CPI has fallen consistently since its peak of over 11% in October 2022, the Bank has made it clear that it intends to keep interest rates high enough to bring inflation down until its 2% target is met consistently.

The BoE’s next rate announcement is due 9 May. The next CPI announcement is due 22 May, with many financial planners in Oswestry and beyond sure to be following both announcements closely.

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