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House prices fall 0.4% as "rising mortgage rates have injected uncertainty into the market"

ended 01. May 2024

UK house prices fell by 0.4% in April, after taking account of seasonal effects. This resulted in a slowing in the annual rate of house price growth to 0.6% in April, from 1.6% the previous month, according to the Nationwide. Newspage asked property experts for their views, below.

9 responses from the Newspage community

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Ranald MitchellVerified
Director at bad credit mortgage specialists Charwin Mortgages
Buyers are behaving cautiously at the moment so the fall in prices in April comes as no surprise. The ebullience at the start of the year has been slowly eroded as mortgage rates have edged up. Supply has improved but the dwindling confidence in the market will only be resolved by a base rate cut. With many prospective buyers and movers stalling, and house prices largely flatlining, those waiting for better times could be in for a very long wait.
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Michelle LawsonVerified
Director at Lawson Financial
Rising mortgage rates have injected uncertainty into the market over the past month or so. Though there is still demand, we need a base rate cut and a Stamp Duty incentive to kickstart the market and get things moving again. Also, a General Election needs to be called sooner rather than later. The absence of a date for the General Election is adding to the mood of caution.
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James Mason0
Owner at Hawksman Real Estate
Since the start of the Summer term, we’ve seen a significant increase in activity. Lots of great family homes are coming to the market, which has resulted in a staggering number of new buyers registering their details. Rising mortgage rates are definitely a factor in the market at present so any downward movement on that front in the next few weeks would set an already smouldering market on fire.
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Tim Allcott0
Managing Partner at Allcott Associates
The property market was quite variable across the regions we work across in April. House markets in The Midlands, South East and Bristol have been moving well, whereas East Anglia has lagged behind. It was a slow start to the year for Yorkshire and Lancashire, but April saw rapid, and welcome, growth in the North. Rising mortgage rates appear to have steadied the market slightly. We haven't seen the springtime boom that we normally see; but the supply and sale of properties has been fairly consisent overall, suggesting that those who really want to move are still finding a way to make it work, either by adjusting expectations of what they can afford or forking out more on mortgage payments with the assumption that rates will drop in coming years. The housing market is ticking over. I'd expect that first cut in the base rate to bring on a mini housing boom as better mortgage rates will persuade those who are currently undecided about moving to take action.
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Stephen PerkinsVerified
Managing Director at Yellow Brick Mortgages
If you wanted evidence of how mortgage rates can impact the property market, this is it. Enquiries from buyers were bouyant in April, but many are holding off pulling the trigger and offering on properties. More properties are being added daily, but many that are getting viewings but not offers. The tinder is dry, but awaiting the spark to set the market on fire. That spark will be a rate cut by Threadneedle Street but we may have to wait until the second half of the year.
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Simon BridglandVerified
Director at Charwin Private Clients
If you stripped out remortgage and product transfer business, then last month would look like I put my feet up. April was slightly tentative overall as people still come to terms with the new world order of interest rates. I would guess that the ever improving levels of available stock will entice more to start the process of buying especially as we move into the summer months and people start to feel a little more positive. The market isn't static but it isn't accelerating either.
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Dariusz KarpowiczVerified
Director at Albion Financial Advice
April saw a steady uptick in demand for residential properties, with the number of prospective buyers gradually increasing despite the challenges. Rising mortgage rates have certainly made propsective buyers and home movers more cautious, preventing many from stretching their budgets to the limit. To truly invigorate the market, substantial government intervention, perhaps in the form of new affordability schemes, is necessary to bridge the growing gap between property prices and average wages. Looking ahead for 2024, unless significant measures are introduced, we expect prices to continue their slow but upward trajectory.
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Andrew MontlakeVerified
Managing Director at Coreco
Most buyers now believe that house prices will continue to stabilise as the year progresses and any falls will be small and short-lived.

Although we are in the middle of a period of rising mortgage rates and they are set to stay higher for longer, there is an expectation that as inflation finally falls a resultant slide in interest rates will see a deluge of buyers return to the market, further strengthening a housing market still short of supply.

First-time buyers, who have never known lower interest rates and are seeing monthly mortgage costs similar to rental costs, are especially keen to find a property now, together with the canny buyer who knows there are deals to be had in market conditions such as these.
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Graham CoxVerified
Director at Bridging Hub
Demand has slowed down a little in March and April, as the negative impact of slowly rising mortgage rates has started to bite. With mixed signals around house prices, some vendors are pricing unrealistically high causing buyers to sit tight. It's a stalemate which only lower house prices or mortgage rates will unlock. My best guess is property prices will likely fall 5% in 2024 unless the Bank of England cuts the base rate a few times this year.