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UK house prices rebound in April after seven month decline

House for sale sign reading sold by estate agent or real estate letting house prices
Average UK house prices rose to £260,441 in April. Photo: Getty (tagphoto via Getty Images)

House prices increased by 0.5% in April, indicating potential market stabilisation, according to Nationwide.

The average house price rose to £260,441 in April, up from £257,122 in March.

The growth marked the first monthly increase in seven months.

Robert Gardner, Nationwide's chief economist, said the market displayed "cautious indications of a rebound" in April.

"While annual house price growth remained negative in April at -2.7%, there were tentative signs of a recovery with prices rising by 0.5% during the month, after taking account of seasonal effects," he said.

Read more: Rents set to increase as ageing buy-to-let landlords retire

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"April’s monthly increase follows seven consecutive declines and leaves prices 4% below their August 2022 peak."

This pushed up the annual growth rate of house prices, from -3.1% in March to -2.7% in April.

March saw the the largest drop in house prices since the aftermath of the financial crisis in 2009.

Gardner said: “Recent Bank of England data suggests that housing market activity remained subdued in the opening months of 2023, with the number of mortgages approved for house purchase in February nearly 40% below the level prevailing a year ago, and around a third lower than pre-pandemic levels.

"However, in recent months industry data on mortgage applications point to signs of a pickup."

This improvement in the growth rate could be a sign of stability returning to the market following the turmoil brought on by last autumn's mini-budget.

Gardner added that a recent rise in UK consumer confidence may be helping the housing market.

Read more: UK banks: Here’s what to expect from Q1 results

However, he said: "Any upturn is likely to remain fairly pedestrian, as it will take time for household finances to recover, since average earnings have been failing to keep pace with inflation, and by a wide margin over the last few years.

"Mortgage interest rates are also likely to act as a headwind. While they are well below the highs seen in the wake of the mini-budget last year, rates are still more than double the level prevailing a year ago."

Watch: London house prices to 'fall 10% by autumn'

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