House prices rise 5.2% year-on-year

House prices grew on an annual basis for the first time in seven months in April, according to Nationwide.

The average house price increased 5.2 per cent year-on-year to £193,048 in April, which is 1 per cent up on March’s figure.

Separately, Nationwide says levels of homeownership have fallen from around 73 per cent in 2007 to around 65 per cent at the end of 2013.

Nationwide chief economist Robert Gardner says: “The pick-up in price growth has occurred even though the pace of activity in the housing market has remained fairly subdued in recent months. Indeed, the number of mortgage approvals is still well below its long run average and 20 per cent below the levels recorded in early 2014.

“The strength of the economy and relatively subdued pace of activity in the housing market remains something of an anomaly. It is possible that heightened uncertainty ahead of the election is weighing on activity, though there is no compelling evidence from previous UK elections to suggest a strong impact.

“Healthy labour market conditions and continued low mortgage rates should help underpin housing demand in the quarters ahead.”

Mortgage Advice bureau head of lending Brian Murphy says: ”Consumer demand is high, bolstered by stamp duty changes and record low mortgage rates. Lenders have a hearty appetite for business, and it’s generally expected that housing activity will remain strong as the year progresses. It’s too soon to speculate exactly what policies will be in place following May’s polling date, but recent announcements suggest there could be further plans that work in potential buyers’ favour.

“Strong house price growth is indicative of a healthy market, but annual growth has moderated in comparison to last year, which will be welcomed by those with smaller budgets. However, the imbalance between housing supply and demand continues to be a cause for concern, and could push house prices to levels that leave low-income borrowers locked out of the property market.”

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