UK house prices edge higher in April - Nationwide

UK house prices edged higher in April following seven consecutive months of declines, according to figures released on Tuesday by Nationwide.

House prices ticked up 0.5% on the month following a 0.7% drop in March, to an average of £260,441.

On the year, meanwhile, house prices fell 2.7% in April following a 3.1% fall the month before.

Nationwide chief economist Robert Gardner said that while annual house price growth remained negative, "there were tentative signs of a recovery" with the monthly uptick. "April’s monthly increase follows seven consecutive declines and leaves prices 4% below their August 2022 peak," he noted.

"Recent Bank of England data suggests that housing market activity remained subdued in the opening months of 2023, with the number of mortgages approved for house purchase in February nearly 40% below the level prevailing a year ago, and around a third lower than pre-pandemic levels. However, in recent months industry data on mortgage applications point to signs of a pickup.

"This also chimes with the recent shifts in consumer sentiment. While confidence remains subdued by historic standards (as shown in the chart below), people’s views of their own financial position over the next twelve months, and general economic conditions in the year ahead, have both improved markedly in recent months. If inflation falls sharply in the second half of the year, as most analysts expect, this would likely further bolster sentiment, especially if labour market conditions remain strong."

He said that in turn, this would also be likely to support a modest recovery in housing market activity. However, any upturn is likely to remain "fairly pedestrian", as it will take time for household finances to recover, since average earnings have been failing to keep pace with inflation.