‘Taste of things to come’: Year-to-date house price growth slows in April | Business Newsletter

According to new data from the National Construction Association.

The 12.1% growth rate marked the 11th consecutive month of year-over-year home price growth that remained double-digit, although slightly down from the 14.3% gain in March.

Property values ​​rose 0.3 per cent month-on-month, meaning the average UK house price in April was £267,620.

Gabriella Dickens, senior UK economist at Pantheon Macroeconomics, said the slowdown in growth was “not surprising, given the sharp fall in real income and the sharp rise in mortgage rates”.

“We think home price growth will continue to slow from here,” she added, noting that mortgage rates are likely to continue to rise and real disposable income looks set to fall further – both in the context of high inflation and higher taxes. burden.

Martin Beck, EY ITEM Club’s chief economic adviser, agrees, saying: “Slower house price growth could be imminent.

“The drop in real incomes due to high inflation means fewer people will be able to afford to borrow the money needed to buy with higher mortgage rates.”

But he also noted that “just as during a pandemic, the housing market is likely to be relatively immune to economic challenges”. Property value is uncertain. “

“Collateral affordability is a growing concern,” said Myron Jobson, senior personal finance analyst at interactive investor.

“The window for cheap mortgages is closing quickly, and the specter of higher interest rates means mortgage rates are likely to go back to levels we haven’t seen in a while.

“Higher mortgage rates also mean fewer homeowners are able to refinance to save money by receiving lower interest rates.

“However, rapidly rising mortgage rates could cause property values ​​to skyrocket, forcing homebuyers to step back a bit. The burning question is when this will happen.

“If the housing market slows, it could allow inventories to build and lead to a transition to a market with lower home price growth.

“The picture remains dim, as the economic and geopolitical instability stemming from Russia’s devastating invasion of Ukraine is unpredictable.”