Lenders increase mortgage rates as house prices drop

According to data from the UK’s biggest building society, house prices fell last month as potential buyers continued to experience pressures on affordability.

Nationwide have released new figures that show house prices decreased by 0.4% in April compared to previous months. Currently, the average price of a home stands at £261,962 – some 4% below the peak experienced in summer 2022.

green trees near red and white house under blue sky during daytime

News of house prices falling has come after a string of lenders raised rates on new fixed mortgage deals after experts theorised the Bank of England will be slowly cutting interest rates. An example of this is Halifax, who has become the latest lender to announce higher rates, with a plan to put up the cost of its mortgage range by 0.2%.

Against this backdrop, it is estimated that around 1.6 million existing borrowers have relatively cheap fixed deals that will be expiring this year.

Mark Harris, chief executive of mortgage broker SPF Private Clients, said: ‘There are likely to be ups and downs in mortgage pricing in the weeks and months ahead but ultimately borrowers will have to get used to paying more for their mortgages as the days of rock-bottom rates have long gone.’

Experts who helped collected the Nationwide data have revealed that this is the second consecutive fall in monthly house prices. The figures are based on the building society’s own mortgage lending, which does not include buyers who purchase homes with cash or buy-to-let deals.

Year-on-year, research shows the pace of house price growth slowed from 1.6% in March to 0.6% in April.

As a result of sky-high mortgages, Nationwide have reported that first-time buyers have delayed their plans to purchase a property within the next five years.

Image: Paul Kapischka

More on this topic:

Ramped up rural house prices are forcing locals into renting

House prices near peak after fifth monthly rise


Notify of
Inline Feedbacks
View all comments
Help us break the news – share your information, opinion or analysis
Back to top