Caution prevails in a resilient market
House prices rose by 0.4% in April, according to Nationwide.
Annual growth to April was 3.0%, up from 2.2% in March, and was the highest level since May 2025. This momentum will fade over the coming months, however, as inflation and rate rises prompt discretion from buyers.
Approvals for remortgaging reach a 4-year high.
There were 51,300 approvals for remortgaging in March 2026, the highest monthly figure since October 2022. The recent rises in mortgage rates, reminiscent of Autumn 2022, have prompted homeowners to act promptly to secure the best rate. Rates are comparable to those two years ago but may be a shock for buyers coming off a 5-year fixed term. Mortgage approvals for new house purchases remained resilient, up 1.3% from February. The threat of further rate rises is spurring some immediate action in the short-term where buyers have been able to lock in lower rates.
More forward-looking indicators show some signs of a slowdown in market activity.
In April, sales agreed (net of fall throughs) fell by -4.6% on the previous month according to TwentyCI, although they remain up 2.6% on the 2017-19 average. In March, RICS reported that surveyors have seen the lowest level of new buyer enquiries since August 2023, alongside greater levels of unsold stock and downward pressure on prices because of recent mortgage rate hikes. These indicators suggest a slowdown in market activity will be reflected in more lagged transaction and mortgage approval metrics over the coming months.
The Bank of England (BOE) continues to keep an eye on inflationary risks.
The BOE Monetary Policy Committee voted to hold the base rate at 3.75% on 30th April. While forecasting rates to be held until Q3 2027, Oxford Economics notes that continuing geopolitical uncertainty and the secondary inflationary impacts of higher energy costs in the wider economy has increased the risk of a rate increase in the summer. If rates do increase, the higher costs for borrowers over the longer term will impact affordability.
More localised house price data from January shows that Scotland and the North West had the greatest price growth, particularly East Renfrewshire (7.9%), East Dunbartonshire (7.1%) and Renfrewshire (6.8%). The weakest growth was in Brent (-6.0%), Kensington and Chelsea (-5.5%) and Tower Hamlets (-5.3%).