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House prices are up by 12% but increases set to slow, according to Nationwide

In all apart from one month over the last year, annual house price increases have been more than 10%

Originally posted: 2nd May, 2022

Rate of increase is going to slow, says the Nationwide Building Society

UK houses prices are up by 12.1% over the past year, however the rate of increase is going to slow, says the Nationwide Building Society.

Nationwide said that the rise in house prices in April was lower than in March, and this trend was likely to go on as budgets were tightened.

The chances of further rises in interest rates could also affect the housing market.

In all apart from one month over the last year, annual house price increases have been more than 10%, the Nationwide reported.

Across the UK, it said that the average house price in the month of April was £267,620.

Strong buyer demand

The housing market in the UK continues to see demand for properties outstripping the number of properties on the market.

Levels of employment have also been relatively stable, despite the pandemic, which has helped to keep demand up, said Robert Gardner, Nationwide’s chief economist.

A survey for the Nationwide Building Society suggested that 30% of those asked said they were either considering a move or in the process of moving.

The high level of buyer demand has pushed house prices up, despite households being faced with higher costs of living.

Mr Gardner said the cost of living squeeze would eventually impact the market.

"We continue to expect the housing market to slow in the quarters ahead. The squeeze on household incomes is set to intensify," he said.

"Moreover, assuming that labour market conditions remain strong, the Bank of England is likely to raise interest rates further, which will also exert a drag on the market if this feeds through to mortgage rates."

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