UK house prices now sit 4 per cent below all-time high as first-time buyers struggle to get on the ladder

Average UK house priced fell for the second month in a row in April, with property values now sitting at around 4 per cent below their all-time highs typically, according to an index.

The average UK house price in April was £261,962 reported Nationwide.

Nearly half (49 per cent) of prospective first-time buyers looking to buy in the next five years have delayed their plans over the past year, recent research by Censuswide on behalf of Nationwide indicated.

High house prices and mortgage rates were the most commonly cited reasons for these delays.

UK property prices fell by 0.4 per cent month-on-month in April, following a 0.2 per cent fall in March, Nationwide Building Society said.

The annual rate of house price growth more than halved in April, to 0.6 per cent, from 1.6 per cent in March.

Robert Gardner, Nationwide’s chief economist, said the slowdown “likely reflects ongoing affordability pressures”.

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

Mr Gardner continued: “Buying a property in a less expensive area appears to be the most common compromise that prospective buyers will make.

“Around a third (32 per cent) said they would consider a smaller property than they wanted, while 28 per cent would go for a property that needed work doing.

“Amongst recent first-time buyers (those who have bought their first home in the past five years), 38 per cent said they ended up compromising on the property they purchased.”

Second-steppers are also impacted by higher mortgage rates. The average Londoner has to pay £7,500 more a year on their mortgage, according to data released by Zoopla this week.

Tom Bill, head of UK residential research at estate agent Knight Frank, said: “There are added financial pressures in the system as a wave of owners roll off sub-2 per cent mortgages agreed in early 2022.

“We believe demand and house price growth will pick up later this year as a rate cut moves on to the horizon.”

Jeremy Leaf, a north London estate agent, said: “We are not surprised by the small drop in property prices.

“The increase in listings is resulting in more choice for buyers and some heavy negotiations on the ground which means only realistic sellers are proving successful.

“However, underlying demand is much more resilient than it was a few months ago, coinciding with the stronger spring market.”

Sam Mitchell, chief executive of Purplebricks, said: “There is still positive sentiment from buyers and we are seeing viewing activity increase, signalling stability in the housing market.

“While several banks have slightly increased mortgage rates, there has also been an increase in new market offerings, both have sparked buyers into action which has resulted in more sales.”

Peter Arnold, EY UK chief economist, said: “The lenders’ house price series can be volatile from month to month, particularly in times when transaction levels are relatively low, making it harder to mix-adjust the data.

“Just as the apparent strength in January/February looked out of keeping with fundamentals, the latest data is unlikely to mark the start of a renewed fall in property prices.”

Nicky Stevenson, managing director at Fine & Country, said: “The property market remains highly changeable, with prices up slightly one month then falling back the next.

“Although demand continues to pick up nicely with mortgage approvals rising, the economy remains in a fragile position.”