Home costs fell for a second month in a row as mortgage lenders put up charges, based on a closely-watched survey.
Property values dropped by 0.4pc between March and April, the Nationwide home worth index confirmed, beneath economists forecasts for a 0.1pc achieve.
The common residence was price £261,962, which was 0.6pc greater than the identical month final yr, a slowdown from the 1.6pc annual improve recorded in March.
Nationwide’s chief economist Robert Gardner mentioned: “The slowdown seemingly displays ongoing affordability pressures, with long term rates of interest rising in latest months, reversing the steep fall seen across the flip of the yr.
“Home costs are actually round 4pc beneath the all-time highs recorded in the summertime of 2022, after taking account of seasonal results.”
Lenders have been placing up borrowing prices, with the variety of mortgages with charges of over 6pc rising by 10pc for the reason that begin of final month, based on analyst Moneyfacts.
Main lenders together with TSB, Halifax and HSBC have elevated costs on a choice of their mortgages over the previous two weeks as swap charges – the primary pricing mechanism for residence loans – have continued to rise.
Mr Gardner added:
Current analysis carried out by Censuswide on behalf of Nationwide discovered that just about half (49pc) of potential first-time consumers (these trying to purchase within the subsequent 5 years) have delayed their plans over the previous yr.
Amongst this group, essentially the most generally cited cause for delaying their buy is that home costs are too excessive (53pc), however it is usually notable that 41pc mentioned that greater mortgage prices have been stopping them from shopping for.
Coupled with this, 84pc of potential first-time consumers mentioned that the price of residing has affected their plans to purchase, for instance via having much less cash every month to save lots of for a deposit.
Round two thirds (67pc) of respondents at present have between £0 and £10,000 saved in direction of a deposit.
With a 10pc deposit on a typical first-time purchaser property at present round £22,000, it’s not shocking to search out that c.60pc of potential consumers have but to save lots of greater than 1 / 4 of their goal deposit.
Apparently, 55pc of respondents mentioned they might be prepared to purchase in one other a part of the nation the place home costs are cheaper, or the place they may purchase an even bigger property. Inevitably, there’s plenty of variation in how far folks can be prepared to maneuver, however half mentioned they might transfer greater than 30 miles from their present location.
Shopping for a property in a inexpensive space seems to be the commonest compromise that potential consumers will make. Round a 3rd (32pc) mentioned they might take into account a smaller property than they wished, whereas 28pc would go for a property that wanted work doing.
