The average house price has unexpectedly fallen for a second consecutive month in a row, according to a new house price index.
The latest Nationwide house price index figures indicate that the average UK house price in April was £261,962, suggesting the annual rate of house price growth more than halved in April, to 0.6 per cent from 1.6 per cent in March.
The findings also showed that 84 per cent of buyers continue to be impacted by the cost of living, with many short of £12,000 for a deposit.
The slowdown, which likely stems from high mortgage rates, comes despite a predicted 0.2 per cent increase by city forecasters last month.
Property prices have fallen unexpectedly
GETTYData shows property prices fell by 0.4 per cent month-on-month in April, following a 0.2 per cent fall in March, according to the Nationwide Building Society.
Robert Gardner, Nationwide’s chief economic, said the slowdown “likely reflects ongoing affordability pressures”.
He said: “House prices are now around four per cent below the all-time highs records in the summer of 2022, after taking account of seasonal effects.”
The analysis highlighted moderation in the recovery of housing market activity after mortgage approvals rose to their highest level since September 2022.
Nathan Emerson, CEO of Propertymark, said: “Buyers and sellers are starting to accept the new reality of the housing market in the face of current interest rate levels.
“[...] It is encouraging to see that house prices are increasing year on year, giving sellers the confidence they need to put their house onto the market during what will be a busy time for the housing market.”
New research by Censuswide on behalf of Nationwide indicates that nearly half (49 per cent) of prospective first-time buyers looking to buy in the next five years have delayed their plans over the past year.
“Buying a property in a less expensive area appears to be the most common compromise that prospective buyers will make," noted Gardner.
“Around a third (32 per cent) said they would consider a smaller property than they wanted, while 28 per cent would go for a property that needed work doing.
“Amongst recent first-time buyers (those who have bought their first home in the past five years) 38 per cent said they ended up compromising on the property they purchased."
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Home buyers are still burdened by the cost of living
PAThe analysis found two-thirds of respondents currently have between £0 and £10,000 saved towards a deposit. However, a 10 per cent deposit on typically first-time buyer property currently sits at around £22,000.
Jeremy Leaf, a north London estate agent, said: “We are not surprised by the small drop in property prices.
“The increase in listing is resulting in more choice for buyers and some heavy negotiations on the ground which means only realistic sellers are proving successful.
“However, underlying demand is much more resilient than it was a few months ago, coinciding with the stronger spring market.”