Amid global instability, trimmed rates and a steady Bank of England, brokers hail sturdy market
“You write the housing market off at your peril.”
That was the warning from Jeremy Leaf, north London estate agent and former RICS residential chairman, as new figures showed UK house prices continued to rise in April despite weaker sentiment and geopolitical uncertainty.
Leaf said “prices [are] holding up better than we’d dared hope, particularly of houses, bearing in mind continuing uncertainties about the cost of living, including mortgages,” although he added that “the volume of property on the market means it’s taking longer to secure commitment and likely to continue that way for several months yet.”
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Nationwide’s latest House Price Index reported that annual house price growth accelerated to 3% in April, up from 2.2% in March, with values rising by 0.4% on a seasonally adjusted monthly basis. The average UK home now costs £278,880, compared with £277,186 in March, underlining the market’s resilience after last year’s slowdown.
Robert Gardner, Nationwide’s chief economist, said that “despite the uncertainty caused by developments in the Middle East and the subsequent rise in energy prices, the UK housing market has continued to regain momentum following the slowdown recorded around the turn of the year.”
Jason Tebb, president of OnTheMarket, drew a similar conclusion. “Despite the challenging economic backdrop, the housing market continues to demonstrate the resilience it has become known for. Average prices edged up slightly as focused buyers are price-sensitive and negotiating hard, while sellers realise that they will struggle to sell over-priced homes,” he said.
“Those who need to move are continuing to transact and will be buoyed by lenders trimming their mortgage rates in recent days. The Bank of England’s decision to hold interest rates for another month should also have a steadying effect on momentum in the market, suggesting stability and no need to panic. Increased stock, as sellers try to take advantage of what is usually a busier spring market, is giving buyers more choice than has been the case for a while and this should help keep prices in check.”
Nationwide’s figures point to a market that is proving more robust than many had expected at the start of the year. However, they also sit alongside signs of softening sentiment. The building society highlighted that GfK’s headline consumer confidence index has fallen to its lowest reading since late 2023, reflecting a more pessimistic view of the economic outlook and households’ finances over the next 12 months.
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On housing specifically, Nationwide noted Royal Institution of Chartered Surveyors data showing a sharp fall in new buyer enquiries in March, taking that measure to its weakest level since 2023 amid higher interest rates and a more uncertain backdrop. Leaf said that although “buyers and sellers are negotiating hard…the overwhelming majority of transactions are continuing,” with greater realism now evident on both sides of the deal.
Nationwide argues that comparatively strong household balance sheets are helping to support activity. In aggregate, household debt is at its lowest level relative to income for around 20 years, while sizeable savings buffers built up since the pandemic, though unevenly spread, are still playing a role.
Affordability has also seen some repair. The report notes that housing affordability had been improving as income growth outpaced house price gains by a wide margin, combined with a modest fall in mortgage rates from the peaks reached in 2023.
Although market interest rates have moved higher again in recent months, Nationwide stresses that the impact on affordability has been limited so far. Swap rates, which underpin fixed-rate mortgage pricing, remain well below their 2023 highs and are broadly in line with levels seen in late 2024, implying only a partial reversal of earlier improvements in borrowing costs.
For now, that combination of firmer prices, cautious but continuing demand and more realistic pricing behaviour suggests a housing market that is cooling only at the margins rather than stalling outright.
