After several months of moderation, Nationwide reveals the pace of house price growth picked up in April, with prices rising by 1.2 per cent during the month.
As a result of a pick up in April, Nationwide reported annual house price growth has reached double digits for the first time in four years, with the price of a typical home 10.9 per cent higher than it was in April 2013.
But Robert Gardner, chief economist of Nationwide, warned the introduction of Mortgage Market Review measures could have an impact on activity levels in the months ahead as the new measures bed down.
However, he added underlying demand was likely to remain robust, as mortgage rates remain close to all-time lows and as consumer confidence improves further on the back of stronger labour market conditions and the brighter economic outlook.
He said: “Earnings growth is beginning to pick up, with wage increases finally outpacing the rise in the cost of living in February. Nevertheless, house price growth is outstripping income growth by a wide margin.
“The risk is that unless supply accelerates significantly, affordability will become stretched.”
Nationwide’s latest house price index comes after specialist lender Precise Mortgages reported young adults and those nearing retirement had the most negative outlook on the housing market, with 39 per cent believing that mortgages are out of reach for first-time buyers.
Mark Harris, chief executive of mortgage broker SPF Private Clients, said: “London continues to power ahead with prices around 20 per cent higher than pre-crisis levels. This is fuelled by growing consumer confidence and the availability of cheap mortgage rates, encouraging more buyers to take that first step onto the ladder.
“Despite rising house prices, affordability is not an issue, and with the new Mortgage Market Review rules finally kicking in last week, is not likely to become one as lenders take a forensic approach when deciding how much to lend.
“There may be a slowdown in lending over the next month or so as the new rules bed in but this is likely to be nothing more than a blip, given the pent-up demand to buy.”
