House Prices unexpectedly Slump Due to Rising Mortgage Rates

According to a closely watched survey, House prices fell for a second month as mortgage lenders put up rates.

Property values dropped by 0.4pc between March and April, the Nationwide house price index showed, below economists forecasts for a 0.1pc gain.

The average home was worth £261,962, which was 0.6pc higher than the same month last year, a slowdown from the 1.6pc annual increase recorded in March.

Nationwide’s chief economist Robert Gardner said: “The slowdown likely reflects ongoing affordability pressures, with longer-term interest rates rising in recent months, reversing the steep fall seen around the turn of the year. 

“House prices are now around 4pc below the all-time highs recorded in the summer of 2022, after taking account of seasonal effects.”

According to analyst Moneyfacts, lenders have been putting up borrowing costs, with the number of mortgages with rates of over 6pc rising by 10pc since the start of last month.

Major lenders, including TSB, Halifax, and HSBC, have increased prices on a selection of their mortgages over the past two weeks as swap rates - the main pricing mechanism for home loans - have continued to rise.