MortgagesMay 2 2023

House price growth on the rise after 7 months of falls

Search supported by
House price growth on the rise after 7 months of falls
Jason Alden/Bloomberg

House price growth began to edge upwards again in April after seven months of consecutive falls.

According to Nationwide’s most recent house price index, average house prices grew by 0.5 per cent in April as buyer confidence returned.

This however, remains 4 per cent below their August 2022 peak, while annual house price growth remains negative at -2.7 per cent. 

The beginning of the year saw a slow start for the housing market, with the number of mortgages approved in February down 40 per cent on the previous year and 30 per cent on pre-pandemic levels, according to the Bank of England.

Today’s figures have been described by Nationwide’s chief economist, Robert Gardner as showing “tentative signs of recovery” as he noted the recent upward shift in consumer sentiment. 

“While confidence remains subdued by historic standards, 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,” Gardner said. 

He also noted that if inflation falls sharply in the second half of the year, as most analysts expect, sentiment will improve further. 

“This, in turn, would also be likely to support a modest recovery in housing market activity. But 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, and by a wide margin over the last few years,” Gardner said.

Furthermore, he added that mortgage interest rates are likely to somewhat dampen potential price growth. 

“While they are well below the highs seen in the wake of the mini-Budget last year, rates are still more than double the level prevailing a year ago,” Gardner said.

Predictions of doom

Others in the industry noted that the rise seen in house prices during April is a sign that the market will not hit the lows some have predicted for this year. 

“The property market armageddon some predicted is simply unlikely to materialise,” said Nick Harris, co-founder of Quarters Residential Estate Agents.

“This may be the beginning of the bounce back from the turbulence caused by the mini-Budget. 

“While some discretionary buyers continue to sit tight, serious buyers remain very active. Sellers are being much more realistic on price, and are typically also buyers so they appreciate a more balanced property market,” Harris explained. 

Likewise, mortgage broker Adam Smith from Alfa Mortgages noted that people sense that the economy may “hold better than many predicted” and this is reflected in the housing market. 

However he added: “That said, there are countless variables at play and one month of growth does not a market make. But in the current climate you have to take the positives.”

What do you think about the issues raised by this story? Email us on to let us know