Increase of 0.5% in April ended seven consecutive months of decline, Nationwide data shows
UK house prices unexpectedly rose between March and April, according to data from mortgage provider Nationwide that suggests the property market is stabilising as borrowing costs ease.
Prices increased 0.5 per cent last month, ending seven consecutive months of decline and beating analysts’ forecasts of a 0.4 per cent fall.
Robert Gardner, Nationwide’s chief economist, pointed to “tentative signs of a recovery” in the property market reflecting recent improvements in consumer confidence and an easing of mortgage rates after the peak reached in the autumn following Liz Truss’s “mini” Budget.
Consumer confidence rose to its highest level in more than a year in February. Mortgage approvals are expected to show the second consecutive increase in March, according to analysts’ forecasts of Bank of England data that will be published on Thursday.
“Buyers are finally making their move after months of waiting and stalling,” said Tomer Aboody, director of property lender MT Finance. He attributed the trend to expectations that inflation would fall sharply by the end of the year and that the Bank of England’s bank rate was approaching its peak.
Solid nominal wage growth and easing mortgage rates could help affordability in the months ahead, but many economists said April’s rise in price was unlikely to be the start of a significant rebound.
Nationwide’s Gardner said any upturn was likely to remain “fairly pedestrian” as a result of the continuing cost of living crisis and because mortgage rates were still higher than they were last year.
Samuel Tombs, chief UK economist at the consultancy Pantheon Macroeconomics, said he expected the housing market to bottom out only at the end of this year, resulting in an 8 per cent peak-to-trough fall in prices.
“Demand likely will remain weak enough to ensure that the stock of unsold properties continues to creep up and prices continue to fall,” said Tombs.
The unexpected rise in house prices was enough to trigger a relief rally in housebuilders’ shares, which have been hit by heavy selling in recent months on the back of the gloomy outlook for the housing market. The rally was led by Persimmon, which jumped more than 6 per cent.
Source Financial Times https://on.ft.com/44pGxhN