House prices in the UK have risen by an average of 1.1% annually to £281,373, official data has shown.
This was stronger than the 0.9% yearly growth in UK house prices seen in March and a 0.3% month-on-month increase in prices, according to figures from the Office for National Statistics (ONS).
Confidence in the market
With April reporting a stronger rise in average house prices than May, industry figures suggested the prospect of a base rate cut and an adjustment to mortgage rates was upholding market activity.
Nicky Stevenson, managing director at Fine and Country, said: “After so many buyers paused their house buying plans towards the end of 2023, stable interest rates and the prospect of a reduction this summer [have] been enough to instil confidence, with many people committing to a move.”
She added: “As we expect the economic landscape to continue improving, it’s likely that we will see a spike in activity as the year progresses, especially with an interest rate cut from the Bank of England on the horizon.
“This would positively affect homebuyers by making mortgages more affordable, increasing consumers’ spending power and helping them to get their desired properties more easily.”
Sara Palmer, distribution director at The Mortgage Lender (TML), said: “A second consecutive month of house price growth will prompt hopes that demand in the property market is tentatively back, after a period of volatility. With the rate of inflation decreasing, many prospective buyers will likely be growing in confidence and prepared to make their next move in the coming months.
“Despite the UK election standing ahead of a potential interest rate cut, scores of buyers are taking the plunge to buy anyway, with many accustomed to the higher mortgage rates on offer.”
Mobeen Akram, new homes director at Mortgage Advice Bureau (MAB), said the new homes market told a slightly different story.
In April, the average price of a resold property fell by 1.3% annually to £275,115, while new-build home prices rose 15.3% to £393,888.
Akram said: “It’s still very much a time for homebuyers to take advantage of the current market and competitive deals available.
“Although we’re still very much in a wait-and-see phase, now is not the time to be sitting on our hands. There’s plenty we can do to ensure that the rest of 2024 lays the foundations for a strong 2025.”
Regional differences
In England, house prices increased by 0.6% annually to £298,229, while in Scotland, there was a 4.5% rise to £190,345. Average house prices in Northern Ireland went up by 4% to £178,499 in Q1.
Wales reported the most muted growth in average house prices, with a 0.4% yearly rise to £208,184.
Within England, house prices in the North West saw the strongest uplift, with a 3.8% rise to £216,714.
The sharpest fall in house prices in England was seen in London, where prices plummeted by 3.9% to an average of £501,880.
Jonathan Hopper, CEO of Garrington Property Finders, noted that these figures resulted from sales completed in January and February following a “surge of activity” at the start of the year.
He added: “So while today’s data is more than a little sepia-tinted, its resilience is still welcome. At a national level, it reveals a market stabilising nicely – with the number of homes changing hands in April up nearly 10% compared to the same month last year.
“But huge regional disparities persist as the high cost of mortgage borrowing forces many buyers to focus their search on more affordable areas. That’s why average prices rose by 3.8% in North West England and they fell by 3.9% in London over the past year.
“The progress is no blip, but things have cooled since this data was recorded. While the number of homes being listed for sale has continued to notch up, some buyers have decided to bide their time a little longer.
“The combination of election uncertainty, and the hope that an interest rate cut is now just around the corner after inflation fell back to the Bank of England’s target, means that while there is plenty of buyer demand, it remains unhurried and highly price-sensitive.”
Strong growth in semi-detached house prices
Semi-detached homes reported the highest annual increase in average prices, with a 2.2% jump to £274,974.
The average price of a terraced home rose 1.6% to £231,942, while the average price of a detached home increased by 0.3% to £429,081.
The values of flats and maisonettes stayed flat, with just a £54 difference between average prices this year and in 2023.
