That’s according to Nationwide, which also measured a slowdown in annual house price growth. While prices are still up compared to a year ago, the annual rate of growth fell to just 0.6% in April from 1.6% in March.
Robert Gardner, Nationwide’s chief economist, said: “The slowdown likely reflects ongoing affordability pressures, with longer term interest rates rising in recent months, reversing the steep fall seen around the turn of the year.
“House prices are now around 4% below the all-time highs recorded in the summer of 2022, after taking account of seasonal effects.”
Cost of living squeeze
Research commissioned by Nationwide found that nearly half (49%) of prospective first-time buyers (those looking to buy in the next five years) have delayed their plans over the past year.
The most commonly cited reason for delaying their purchase is that house prices are too high (53%), but 41% said that higher mortgage costs were preventing them from buying.
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Gardner added: “Coupled with this, 84% of prospective first-time buyers said that the cost of living has affected their plans to buy, for example through having less money each month to save for a deposit.
“Around two thirds (67%) of respondents currently have between £0 and £10,000 saved towards a deposit. With a 10% deposit on a typical first-time buyer property currently around £22,000, it is not surprising to find that around 60% of prospective buyers have yet to save more than a quarter of their target deposit.”
Sarah Coles, head of personal finance at Hargreaves Lansdown, added: “April was a bit of a washout for sellers, with rising mortgage rates pouring cold water on the fires of optimism that had been lit under the market early in the year. The fire is not yet out though.
“We know from yesterday’s Bank of England figures that mortgage approvals have risen again, and we also know these figures have suffered from seasonal adjustment – which expects a bounce in April. However, it’s not going to be balm to the souls of sellers.
“Meanwhile, first-time buyers face the worst of all worlds, as rising house prices and more expensive mortgages price them out of the market.”
