House prices rise after seven months of consecutive falls, says Nationwide, as April bounce adds £3,319 to the cost of the average home
House prices increased for the first time in eight months in April, with monthly growth of 0.5 per cent adding £3,319 to the cost of the average home.
This means the average house price in the UK is now £260,441, up from £257,122 in March, according to Nationwide’s latest house price index.
However, experts warn monthly figures can often be volatile and point to longer term figures as a better guide to market direction.
House prices are 4 per cent below their peak in August 2022 and down 2.7 per cent annually.
The average house price is now £260,441, up 0.5% from March
Robert Gardner, Nationwide’s chief economist, said: ‘Recent Bank of England data suggests that housing market activity remained subdued in the opening months of 2023, with the number of mortgages approved for house purchase in February nearly 40 per cent below the level prevailing a year ago, and around a third lower than pre-pandemic levels.
‘However, in recent months industry data on mortgage applications point to signs of a pickup.’
Mortgage rates peaked in October last year in the wake of Liz Truss’s chaotic mini-Budget, which sent the cost of borrowing soaring.
Rates have since dropped, with the average five-year fixed deal at 4.3 per cent, according to the Bank of England.
Rates peaked at an average of 5.6 for a five-year fix in October, according to the lender, but there are now a number of deals on the market for below 4 per cent.
At the same time a surge in new home loan launches means the number of mortgages available to borrowers is more than double that of last October.
Consumer confidence has increased slightly on the hope inflation will fall later this year
Furthermore, Gardner noted, consumer sentiment has improved despite remaining subdued by historic standards.
People’s view of their own financial position over the next 12 months and the general economic conditions in the next year have improved. Analysts expect inflation to fall sharply in the second half of the year, despite inflation remaining stubbornly high at 10.1 per cent.
There is hope this will increase activity in the housing market, although Gardner warns It will take time for household finances to recover as wages have failed to keep pace with inflation.
Mortgage rates soared in October but have been slowly falling since the start of this year
Mark Harris, chief executive of mortgage broker SPF Private Clients, says: ‘Swap rates, which underpin the pricing of fixed-rate mortgages, have risen again on the back of short-term volatility.
‘However, lenders continue to reduce their fixed rates, albeit at a slower pace than before, with bigger reductions seen on higher loan-to-value mortgages as they try to attract first-time buyers.’
What to do if you need a mortgage
Borrowers who need to find a mortgage because their current fixed rate deal is coming to an end, or because they have agreed a house purchase, should explore their options as soon as possible.
This is Money’s best mortgage rates calculator powered by L&C can show you deals that match your mortgage and property value
What if I need to remortgage?
Borrowers should compare rates and speak to a mortgage broker and be prepared to act to secure a rate.
Anyone with a fixed rate deal ending within the next six to nine months, should look into how much it would cost them to remortgage now – and consider locking into a new deal.
Most mortgage deals allow fees to be added the loan and they are then only charged when it is taken out. By doing this, borrowers can secure a rate without paying expensive arrangement fees.
What if I am buying a home?
Those with home purchases agreed should also aim to secure rates as soon as possible, so they know exactly what their monthly payments will be.
Home buyers should beware overstretching themselves and be prepared for the possibility that house prices may fall from their current high levels, due to higher mortgage rates limiting people’s borrowing ability.
How to compare mortgage costs
The best way to compare mortgage costs and find the right deal for you is to speak to a good broker.
You can use our best mortgage rates calculator to show deals matching your home value, mortgage size, term and fixed rate needs.
Be aware that rates can change quickly, however, and so the advice is that if you need a mortgage to compare rates and then speak to a broker as soon as possible, so they can help you find the right mortgage for you.
> Check the best fixed rate mortgages you could apply for