UK House Prices Decline Amid Interest Rate Uncertainty
Nationwide reports unexpected consecutive monthly drops in UK house prices, attributing the decline to uncertainty surrounding interest rates and escalating mortgage costs, thereby dampening the usual spring homebuying season.
Decline in April:
Nationwide's latest data reveals a 0.4% decrease in the average house price in April compared to March, marking the second consecutive monthly decline.
Annual house price growth also slowed to 0.6% in April from 1.6% in the previous month, indicating ongoing affordability pressures.
Impact on Buyers:
A survey commissioned by Nationwide indicates that nearly half of potential first-time buyers have postponed their plans in the past year due to high house prices and increased mortgage expenses. Many potential buyers express a willingness to consider purchasing in areas with lower property prices or for larger homes.
Economic Concerns:
Economists view the consecutive monthly declines as potentially indicative of a trend, adding pressure on the Bank of England ahead of its upcoming interest rate announcement. Increased fixed mortgage rates by major lenders, including Barclays, HSBC, and NatWest, contribute to the affordability challenge for buyers.
Forecasts and Predictions:
Some economists anticipate an interest rate cut by the Bank of England later this year, though predictions on timing vary. Despite the current downturn, analysts like Tom Bill of Knight Frank foresee a potential rebound in demand and house price growth as a rate cut becomes more likely.
