The average UK house price increased by 0.5% month on month in April, following seven consecutive falls, according to an index.
Nationwide Building Society, which released the figures, suggested they could be “tentative signs of a recovery”.
Annual house price growth remained negative in April, with prices 2.7% lower than a year earlier.
The average UK house price in April was £260,441, Nationwide said.
There were tentative signs of a recovery, with prices rising by 0.5% during the month
Robert Gardner, Nationwide Building Society
Robert Gardner, Nationwide Building Society’s chief economist, said: “While annual house price growth remained negative in April at minus 2.7%, there were tentative signs of a recovery, with prices rising by 0.5% during the month (after taking account of seasonal effects).
“April’s monthly increase follows seven consecutive declines and leaves prices 4% below their August 2022 peak.
“Recent Bank of England data suggests that housing market activity remained subdued in the opening months of 2023, with the number of mortgages approved for house purchase in February nearly 40% below the level prevailing a year ago, and around a third lower than pre-pandemic levels.
“However, in recent months industry data on mortgage applications point to signs of a pick-up.”
Mr Gardner continued: “If inflation falls sharply in the second half of the year, as most analysts expect, this would likely further bolster sentiment, especially if labour market conditions remain strong.”
This, in turn, would also be likely to support a modest recovery in housing market activity, he said, adding: “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.
“Mortgage interest rates are also likely to act as a headwind. 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.”
Nathan Emerson, chief executive of estate agents’ body Propertymark, said: “Our member agents are reporting transaction levels year on year to be stable as a stream of new properties enter the market with serious buyers still keen to move.
“Sellers are still in a strong position to sell; however, they can no longer test the market at higher prices and align with those achieved last year. Instead, they will need to reduce or be open to offers for a more realistic and efficient sale.”
Buyers are a lot more aware of today’s competitive market conditions
Matthew Thompson, Chestertons
Tom Bill, head of UK residential research at estate agent Knight Frank, said: “The reverberations from the mini-budget that shook the UK property market are fading.
“Price declines are bottoming out and many buyers have accepted the new normal for mortgage rates as stability returns to the lending market.”
Matt Thompson, head of sales at estate agent Chestertons, said: “Savvy house-hunters used the Easter holidays to continue their search online and inquire about properties to arrange a viewing as soon as possible.
“April has therefore been a busy month, particularly as buyers are a lot more aware of today’s competitive market conditions.”
Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said: “The small month-to-month increase in Nationwide’s measure of house prices – the first since August – probably is just a blip away from its downward trend, rather than a sign of emerging stability in the market.
“Other timely evidence continues to point to an ongoing decline in house prices. For instance, Rightmove’s unadjusted measure of asking prices rose by just 0.2% month to month in April, far less than average 1.2% increase for the time of the year.”
With average prices still falling in many areas, this is unquestionably a buyer’s market
Jonathan Hopper, Garrington Property Finders
Jason Tebb, chief executive of property search website OnTheMarket.com, said: “More stock is becoming available, as the typically busier spring months start to encourage more sellers to come to market, providing buyers with increased choice more akin to pre-pandemic conditions.
“This, combined with tighter budgets as a result of consecutive interest rate rises and the high cost of living, means that buyers are less willing or able to pay inflated property prices.”
Jonathan Hopper, chief executive of property buying agency Garrington Property Finders, said: “With average prices still falling in many areas, this is unquestionably a buyer’s market.”
Jeremy Leaf, a north London estate agent, said: “Not only are lenders being cautious, buyers are also ensuring they have sufficient resources, not only to cover repayment, improvement and other costs, as well as getting the best property deal they can before taking the plunge.”
