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Nationwide: House prices fall well below 2022 levels

House prices dropped by 0.4% in April, falling 4% below all-time highs recorded in the summer of 2022, Nationwide’s house price index has revealed.

Growth is still on the up annually, sitting 0.6% higher than the same month last year.

It seems some first-time buyers are hoping prices will fall before buying property, as half (49%) of aspiring buyers said they delayed their plans to buy in the past 12 months, with 53% being put off by high house prices, and 41% by higher mortgage rates.

Sarah Coles, head of personal finance at Hargreaves Lansdown, said: “First-time buyers face the worst of all worlds, as rising house prices and more expensive mortgages price them out of the market.

“It means that those who were optimistic about an imminent cut in rates at the start of this year will be getting increasingly frustrated.

“And things aren’t set to get any easier in the immediate future either, because the market isn’t expecting rate cuts until August or September – although June can’t be ruled out entirely.

“It’s also expecting just two or three cuts this year, so we’re not going to see massive movements in mortgage rates.”

The average house price is £261,962.

By the end of April the average 2-year fix cost 5.83% in April, up from 5.56% in January, Moneyfacts data shows.

Jeremy Leaf, north London estate agent and a former RICS residential chairman, said: “We are not surprised by the small drop in property prices. The increase in listings is resulting in more choice for buyers and some heavy negotiations on the ground which means only realistic sellers are proving successful.

“However, underlying demand is much more resilient than it was a few months ago, coinciding with the stronger spring market. There is confidence that affordability will improve now that inflation seems to be more under control and despite recent relatively small increases in mortgage payments.”

Tomer Aboody, director of property lender MT Finance, said: “With a drop in house prices said to be created by a lack of affordability among buyers and uncertainties around interest rates and inflation, some stability or help is needed.

“Whether this comes from reduced interested rates, more flexibility on mortgages or potentially some stamp duty reform, buyers need to feel confident that they can commit to a purchase and move.

“Although property prices are lower, when you put this in context they’re only 4% below their peak in 2022, which means they’re still high and unaffordable in many instances. More volume of stock coming to market is needed and would-be sellers need to be encouraged to move in order to help keep prices in check.”

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