House prices grew 0.5% in April, the first monthly rise since the mini-budget in September last year, according to Nationwide. This leaves prices -4.0% below their pre-budget peak last August, and down -2.7% on an annual basis. While we have to be cautious about monthly volatility, the rate of falls had already been slowing, and last month’s growth is another sign of a gradual return of confidence to the market.

This has come alongside recovering market activity. After falling significantly in the wake of the mini-budget last year, the number of new sales agreed in April stood at just -6% below the 2017-19 average for the month, although -17% lower than the high water mark of activity last April, according to TwentyCI.

Mortgage approvals, another key forward indicator, have also been recovering from a winter lull, and rose to 85% of the 2017-19 average in March, according to the Bank of England. Completed sales volumes have remained more robust, and sat at 96% of the pre-Covid average for March, according to HMRC.

Growing numbers of surveyors are reporting rising demand and supply, according to the RICS March survey. However, the net balance of opinion for both indicators remained in negative territory. More surveyors reported higher levels of supply than demand. This imbalance will continue to put downward pressure on prices for now, despite the most recent month’s uptick in house values.

The pace of mortgage rate falls has slowed, according to the Bank of England. Lenders have been increasingly tightening margins since November, which are now typically lower than their pre-Covid levels. There now remains little room for further compression, meaning that rates are unlikely to fall much further. With an additional hike to the base rate on the cards due to stubbornly high inflation, quoted rates may even rise slightly. The size of this increase will depend on the degree to which this base rate hike is already priced in.

Annual house price growth in January was strongest in Hastings, up 16.7%. Torridge and Torbay in Devon had the second and third strongest growth at 15.1% and 14.5%. Aberdeen remained the only place seeing annual price falls of -2.2%, with Hammersmith and Fulham and East Renfrewshire in Scotland seeing the lowest growth of 0.9% and 1.1% respectively. 

Annual rental growth across the UK slowed further in March at 10.6% down from a peak of 12% in July 2022. Only the West Midlands, North East, and Scotland have seen increases in monthly rental growth, while all other regions have seen growth slow, according to Zoopla. Richmondshire was the only local authority to have annual rental falls, at -4.5% to February.

London remained the region with the greatest annual rental growth at 14.2% in March. However, when compared to the start of the pandemic in March 2020, London’s growth still lags behind the UK average of 21.5%. In this time period Wales has seen the greatest growth of 27% followed by the North West at 24.7%.