House prices cool

Annual house price growth fell back below 5 per cent in April, according to Nationwide’s latest house price report.

The price of a typical house in the UK is now £163,573, almost £7,500 more than at this time last year. This is equivalent to a price increase of just over £20 per day over the last twelve months.

“The cooling prices in April was not unexpected given the surge in March and shows the wisdom of not placing too much emphasis on one month’s set of numbers,” says Fionnuala Earley, Nationwide’s group economist.

“The underlying picture remains reasonably healthy as demand conditions have remained quite firm. While the number of house purchase approvals fell back sharply in February this remains at a buoyant level of activity, well above the ten year average of about 100,000 a month,” continues Earley.

Estate agents are reporting some increased levels of supply on their books as new sellers come to the market, perhaps encouraged by the recent upturn in prices. But supply is still at a relatively low level and in spite of strong buyer interest, this, coupled with higher house prices choking off some demand, suggests that activity will fall towards its longer-term average over the coming months.

“Looking forward, we continue to expect some month to month volatility in the house price numbers as the market settles down after the unseasonably strong winter months and adjusts to the economic conditions on the horizon,” says Earley. “While we do not expect any early move in interest rates that would stimulate or dampen the market, there are other economic factors that will affect it through their impact on disposable income and confidence.”

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