Nationwide April HPI 2023

The housing market always sees a boost in the Spring, but don't confuse this data with the green shoots of recovery. The annual figure is still down, and this is expected to get worse over the next few months, especially if the central bank increases rates again this month. This will snub out the potential recovery that may have come if rates stabilised before reducing, but the Bank of England is convinced of its mission of ever-increasing rates. A recovery in the housing market won't commence until rates go into reverse, and most economists don't expect this until late summer.

This is positive news and hopefully puts to bed some of the wild predictions about house prices dropping by 50%. But let's not celebrate yet - it's still very early to be saying that we're on the road to recovery and the economy as a whole is still very fragile. Prices over the last 12 months are down and this upwards trend could just be down to a seasonal uptick as we usually see in the spring. The expectations of another rate rise in the next few weeks could kill off this recovery but it's the only stick to hit persistent double-digit inflation with. Consumer Confidence is the watchword - anything that hits this in the coming weeks/months will inevitably push prices back down.

A minor uptick in home prices provides a ray of hope, but it is hardly a cure for revitalising the property sector at this moment. The actual cure is confidence, which may be fostered through stable and decreasing interest rates.

As the Federal Reserve contemplates another rate rise and the Bank of England readies itself to follow suit given recent inflation figures, the market calls for an invigorating stimulus. The responsibility to provide that much-needed jolt resides with the distinguished occupants of 10 and 11 Downing Street.