As UK house prices dip again, Nationwide Building Society cites severe affordability issues and rising mortgage rates as key factors deterring first-time buyers and shaking up the property market.
In April, UK house prices fell for the second consecutive month, with a notable decrease of 0.4% from March, bringing the average price down to £261,962. This was reported by Nationwide Building Society, which also noted that annual house price growth had slowed to 0.6%. Robert Gardner, Nationwide’s chief economist, attributed this downward trend primarily to affordability pressures exacerbated by rising long-term interest rates. Additionally, Nationwide found that nearly half of prospective first-time buyers have postponed their purchasing plans, influenced by the high costs of homes and increasing mortgage rates.
The effects of higher mortgage rates have been pronounced since the elimination of sub-2% mortgage deals in early 2022, fostering financial challenges for both current homeowners and potential buyers. Industry experts including Tom Bill from Knight Frank, Jeremy Leaf, a North London estate agent, and Tomer Aboody from MT Finance expressed concerns over how these changes impact market dynamics, including property negotiations and the balance between demand and supply.
Despite the challenges in the housing market, there has been an uptick in viewing activity, as noted by Sam Mitchell, chief executive of Purplebricks. With buyer interest gradually returning, there’s a sense of cautious optimism amidst the market volatility and the broader economic issues that continue to shape the property landscape in the UK.
