According to Nationwide, UK house prices dipped in April as prospective buyers faced persistent affordability pressures.
UK House Prices Slide as Lenders Raise Mortgage Rates
The UK's largest building society reported that UK house prices had fallen by 0.4% from the previous month.
According to the report, the average house cost £261,962, which is around 4% lower than the high in the summer of 2022.
According to the report, the recent drop in prices was primarily due to the growing cost of borrowing.
The statistics came after several lenders boosted interest rates on new mortgages with fixed rates in recent days.
The increases were motivated by expectations that the Bank of England will cut interest rates less frequently and more gradually.
The Halifax is the most recent lender to release higher rates, with plans to raise the cost of many of its mortgage products by 0.2 percentage points on Thursday.
The interest rate on a fixed mortgage remains constant until the loan expires, typically after two or five years, and a new one is selected to replace it. Doing nothing would leave them with a fluctuating rate, which is extremely expensive.
Approximately 1.6 million existing borrowers' comparatively affordable fixed-rate deals will expire this year.
Mark Harris, chief executive of mortgage broker SPF Private Clients, stated: ”There are likely to be ups and downs in mortgage pricing in the weeks and months ahead but ultimately borrowers will have to get used to paying more for their mortgages as the days of rock-bottom rates have long gone.”
UK Property Values Experience Decline in Annual Rate
Nationwide data show that UK house prices have fallen for the second month in a row. Every locality has its own set of characteristics influencing house prices, thus property values would have fluctuated at various rates across the country.
The data relies on the building society's own mortgage lending, which excludes cash buyers and buy-to-let arrangements. Cash purchasers account for around one-third of all housing sales.
The annual rate of house price rise decreased from 1.6% in March to 0.6% in April.
According to Nationwide, potential first-time buyers are postponing their property purchases due to rising housing prices and borrowing costs.
According to its survey, over half of those planning to buy their first house within the next five years have postponed their plans over the last year.
Single first-time buyers recently admitted to the BBC that they faced much more difficult conditions with only one income.