House price growth slows in April - 2nd May 2024

Nationwide's latest monthly house price index. It shows that annual house price growth slowed in April. And house prices fell slightly month on month in April

The annual rate of change slowed in April, with prices up 0.6% year on year, from a 1.6% year on year increase in March. And house prices fell by 0.4% month on month in April after taking account of seasonal effects. The price of a typical UK home (not seasonally adjusted) increased to £261,962:

Nationwide believes the slowdown likely reflects ongoing affordability pressures, with longer term interest rates rising in recent months, reversing the steep fall seen around the turn of the year. House prices are now around 4% below the all-time highs recorded in the summer of 2022, after taking account of seasonal effects.

According to recent research carried out by Censuswide* on behalf of Nationwide with 1,008 prospective first-time buyers (those looking to buy in next five years), between 15-19 March 2024, nearly half (49%) have delayed their plans over the past year.

Commenting on the research, Robert Gardner, Nationwide's Chief Economist, said:

“Among this group, the most commonly cited reason for delaying their purchase is that house prices are too high (53%), but it is also notable that 41% said that higher mortgage costs were preventing them from buying (see chart below).”

“Coupled with this, 84% of prospective first-time buyers said that the cost of living has affected their plans to buy, for example through having less money each month to save for a deposit. Around two thirds (67%) of respondents currently have between £0 and £10,000 saved towards a deposit. With a 10% deposit on a typical first-time buyer property currently around £22,000, it is not surprising to find that c.60% of prospective buyers have yet to save more than a quarter of their target deposit.”

“Interestingly, 55% of respondents said they would be willing to buy in another part of the country where house prices are cheaper, or where they could buy a bigger property. Inevitably, there is a lot of variation in how far people would be willing to move, but half said they would move more than 30 miles from their current location.”

“Buying a property in a less expensive area appears to be the most common compromise that prospective buyers will make. Around a third (32%) said they would consider a smaller property than they wanted, while 28% would go for a property that needed work doing.”

According to the Nationwide, the research also found that, amongst recent first-time buyers (those who have bought their first home in the last five years), 38% said they ended up compromising on the property they purchased. Among this group, nearly 40% bought a property to do up (rather than ‘turn key’ ready) while 34% bought in a different area.

*Censuswide abide by and employ members of the Market Research Society which is based on the ESOMAR principles and are members of The British Polling Council.

You can read the full Nationwide report here.

Source: Techlink Professional