The growth rate of 12.1% marked the 11th consecutive month that the annual increase in house prices remained in double digits, although it was slightly reduced from the increase of 14.3% in March. Property values rose 0.3% month-on-month, meaning the average UK house price in April was 7. 267,620. Robert Gardner, chief economist at Nationwide, said: “Housing market activity has remained stable as mortgage approvals continue to exceed pre-COVID levels. “Demand is supported by strong labor market conditions, where employment growth has remained strong and the unemployment rate has fallen to pre-pandemic lows. prices. “Nevertheless, it is surprising that conditions have remained so dynamic, given the growing pressure on household budgets, which has severely undermined consumer confidence.” “Housing prices will continue to slow down from now on” Gabriela Dickens, a senior UK economist at Pantheon Macroeconomics, said the slowdown was not surprising, as real incomes fell sharply and mortgage rates rose. “We believe that house price growth will continue to slow down from now on,” he added, noting that mortgage rates are likely to continue to rise and real disposable income looks set to fall further – both in a context of high inflation as well as higher tax burden. Martin Beck, chief financial officer of the EY ITEM Club, agreed, saying: “A slower rise in house prices could be a taste of what follows. “The squeezing of real incomes from high inflation means that fewer people will be able to afford to borrow the amount they need to buy at higher mortgage rates.” However, he noted that “as during the pandemic, the housing market is likely to prove relatively immune to economic challenges”, adding: “Therefore, while a period of relatively subdued price increases is possible, the EY ITEM Club serious correction in real estate values is unlikely “. “The affordability of mortgages is a growing concern” Myron Jobson, senior personal finance analyst at interactive investor, said: “The affordability of mortgages is a growing concern. “The window for cheap mortgages is closing fast and the range of higher interest rates means that mortgage rates are likely to return to levels we have not seen in a long time. “Higher mortgage rates also mean that fewer homeowners are able to refinance to save money by getting a lower interest rate. “However, the rapid rise in mortgage rates could be reversing the rise in property values, forcing home buyers to back off. The burning question is: when will this happen?”
