UK House Prices Rise Amid High Mortgage Rates

In April, the average asking price for a home across Britain saw a monthly increase of nearly £3,000, reaching £373,971. This 0.8% rise was below the long-term April average of 1.2%. Factors such as increased mortgage rates and a high number of homes for sale, at an 11-year high for this time of year, are limiting overall price growth.

Buyer demand has shown particular strength among first-time buyers, suggesting they are not deterred by current mortgage rates. Price increases were primarily driven by higher-value properties, such as those with four or more bedrooms, where buyers are often less sensitive to borrowing costs.

Geopolitical events, including the war in Iran, have influenced mortgage rates. While rates have stabilized recently, they remain elevated. Future adjustments will depend on UK inflation data and the Bank of England's response, with market expectations leaning towards stability rather than significant rate reductions. Several lenders have recently reduced mortgage rates following drops in swap rates.

This cautious market approach is also evident in rental prices, which saw accelerated growth in March. Average monthly rents for newly-let homes increased by 1.0% year-on-year to £1,373. London reported the highest average rent at £2,305 with a 2.2% increase.