UK house prices fell again in April as mortgage rates began to inch up as projections of a Bank of England interest rate cut were pushed back.
The monthly house price index from Nationwide showed a fall of 0.4% month on month in April after a 0.2% fall in March. Economists had been expecting a small rise.
Compared to a year ago, the index was up 0.6%, slowing from the 1.6% increase in March and below the 1.2% consensus forecast.
“The slowdown likely reflects ongoing affordability pressures, with longer-term interest rates rising in recent months, reversing the steep fall seen around the turn of the year," said Robert Gardner, Nationwide's chief economist.
"House prices are now around 4% below the all-time highs recorded in the summer of 2022, after taking account of seasonal effects."
Mortgage lending increased in March, according to Bank of England figures released yesterday, but providers including NatWest, Nationwide and Santander this week joined the raft of banks that have nudged rates up in recent weeks.
Nearly half of prospective first-time buyers have delayed their plans over the past year, according to research for Nationwide carried out by Censuswide, with the most commonly cited reason being that house prices are too high (53%) or higher mortgage costs were preventing them from buying (41%).
Sam Mitchell, CEO of Purplebricks, said: “There is still positive sentiment from buyers and we are seeing viewing activity increase, signalling stability in the housing market."
While several banks have slightly increased mortgage rates, he said there has also been an increase in new offerings, which together has "sparked buyers into action which has resulted in more sales".