Nationwide building society has warned the average UK house price fell by 0.2 per cent month on month in March. Property values increased by 1.6 per cent annually, taking the average UK house price to £261,142, Nationwide Building Society said.
Robert Gardner, Nationwide’s chief economist, said: “Activity has picked up from the weak levels prevailing towards the end of 2023 but remains relatively subdued by historic standards. For example, the number of mortgages approved for house purchase in January was around 15% below pre-pandemic levels.
“This largely reflects the impact of higher interest rates on affordability. While mortgage rates are below the peaks seen in mid-2023, they remain well above the lows prevailing in the wake of the pandemic.” He said: “Indeed, surveyors report a pick-up in new buyer inquiries and new instructions to sell in recent months. Moreover, with income growth continuing to outpace house price growth by a healthy margin, housing affordability is improving, albeit gradually.
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“If these trends are maintained, activity is likely to gain momentum, though the pace of the recovery is still likely to be heavily influenced by the trajectory of interest rates.” Mr Gardner said: “Across northern England (including the North East, North West, Yorkshire and the Humber, East Midlands and West Midlands), prices were up 1.7% year on year.
“Meanwhile, southern England (including the South West, Outer South East, Outer Metropolitan, London and East Anglia) saw a 0.3% year-on-year fall. London remained the best-performing southern region, with annual price growth recovering to 1.6%. The South West was the weakest performing region, with prices down 1.7% year on year.”
Rob Wood, chief UK economist at Pantheon Macroeconomics, said: “Forward-looking indicators continue to suggest house prices will keep rising as mortgage rates gradually tick down… We continue to expect house prices to rise 4% year over year in 2024.”
Jonathan Hopper, chief executive of Garrington Property Finders, said: “Price rises are still being tempered by the high cost of borrowing.” Nicky Stevenson, managing director at estate agent group Fine & Country, said: “Sellers still need to price sensibly to attract attention, as buyers know they are in a strong negotiating position.”
