According to data from Nationwide, UK house prices rose one per cent during the month of April, after growing just 0.1 per cent in March. The figures show how far the market has moderated: last April the annual rate of growth was 10.9 per cent.
The changes mean that house prices are still at a record high. Nationwide says the average cost of a buying a house in the UK at £193,048, up from £189,494 in March.
Why it’s interesting
The housing market is facing a lot of uncertainty in 2015. As well as the General Election and stamp duty changes, the market is also weighing up the possibility of an interest rate hike and the spectre of a mansion tax.
The property market is often a useful indicator of how the economy is doing in general, and so the muted prices are somewhat of an anomaly. The latest jobs data was bullish and one of the few items of concern was yesterday’s GDP data, which missed expectations. With mortgage approvals being confirmed yesterday as being at a six-month high, there are signs that stronger growth could return.
What Nationwide said
Nationwide’s chief economist Robert Gardner said he expected the market to improve in the coming months:
The pick-up in price growth has occurred even though the pace of activity in the housing market has remained fairly subdued in recent months. Indeed, the number of mortgage approvals is still well below its long run average and 20 per cent below the levels recorded in early 2014.
The strength of the economy and relatively subdued pace of activity in the housing market remains something of an anomaly. It is possible that heightened uncertainty ahead of the election is weighing on activity, though there is no compelling evidence from previous UK elections to suggest a strong impact.
Healthy labour market conditions and continued low mortgage rates should help underpin housing demand in the quarters ahead.
Despite subdued data, the general consensus seems to be that house price growth will rise gradually through the year.