Market conditions are surprisingly favourable, according to an index: 38% of people are actively moving or are considering doing so.
The pace of annual house price growth slowed slightly to 12.1% in April, down from 14.3% in March, the Nationwide Building Society said.
The property value increased by 0.3% month-on-month.
In the UK, the average house price in April was £267,620.
It is surprising that conditions have remained so favourable, given the mounting pressure on household budgets that has severely eroded consumer confidence
Robert Gardner, Nationwide’s chief economist, said: “Annual home price growth slowed modestly to 12.1% in April, from 14.3% in March figures.
“Prices were up 0.3% month-on-month, taking into account seasonal effects – the ninth consecutive monthly increase, although this is the smallest monthly increase since September last year.
“Residential activity has remained solid and mortgage approvals have remained above pre-Covid levels.
“Demand is supported by robust labor market conditions, where employment growth has remained strong and the unemployment rate has fallen to pre-pandemic lows. As the housing stock on the market is still low, this has translated into continued upward pressure on house prices.
“Nevertheless, it is surprising that conditions have remained so favorable, given the mounting pressure on household budgets that has severely eroded consumer confidence.”
Mr Gardner said people’s expectations of their own personal finances in the next 12 months “have fallen to levels last seen during the depths of the global financial crisis more than a decade ago”.
He added: “In addition, housing affordability has deteriorated as house price growth has outpaced income growth by a wide margin over the past two years, while more recently borrowing costs have risen (although they remain low by historical standards).”
For most movers and potential movers, the majority of those surveyed want to trade in
A survey of around 3,000 people for Nationwide this month indicated that 38% in the UK were either moving or considering a move.
Mr Gardner said the share was particularly high in London, where nearly half said they were moving or relocating.
Even in Wales, where the share was lowest, more than 25% were relocating or considering relocating, he added.
These numbers are high, as only about 5% of the UK’s housing stock is converted in a typical year, he added.
Mr Gardner said: “For most movers and would-be movers, the majority of those surveyed want to trade in – with the exception of the over-55s, where nearly 40% are looking for a smaller home, compared to just 7% looking for a larger one. home.”
The survey also found that 17% of those who move or are considering moving said they are doing so at least in part to reduce housing spending, either by moving to another area and/or by moving to a smaller home. moving away.
Mr Gardner added: “We continue to expect the housing market to slow in the coming quarters.
“Pressures on household incomes are expected to increase as inflation is expected to rise further and may reach double digits in the coming quarters if global energy prices remain elevated.
“In addition, assuming labor market conditions remain strong, the Bank of England is likely to raise interest rates further, which will also put a brake on the market if this feeds through to mortgage rates.”
Pressure on real incomes from high inflation will mean fewer people can afford to borrow the amount they need at higher mortgage rates
Nicky Stevenson, director of brokerage group Fine & Country said: “The growth environment is certainly being challenged by a crisis in the cost of living, rising borrowing costs and war in Ukraine.
“This was offset by a supply shortage that has led to bidding wars and a sense of despair among buyers.”
Martin Beck, chief economic adviser to the EY ITEM Club, said: “The pressure on real incomes from high inflation means fewer people can afford to borrow the amount they need at higher mortgage rates.
“Consumer confidence — including household expectations about their own personal finances — fell to near-historic lows in April. And next week’s MPC (Monetary Policy Committee) meeting is likely to lead to another rise in interest rates, driving up mortgage costs.
“But just like during the pandemic, the housing market will likely be relatively immune to economic challenges.
“Those who can afford to buy are more likely to have accrued unplanned savings during the pandemic, an element of which may go into deposits on houses and condominiums.
And the cost of living pressures from rising inflation and the rising price of basic necessities, such as energy, weigh more heavily on low-income households, who rent disproportionately, than on the better-off, who primarily own or are on the market to buy.
“So while a period of relatively slow price growth is likely, the EY ITEM Club believes a serious correction in property values is unlikely.”
Alex Lyle, director of London-based estate agency Antony Roberts, said: “The housing market worth £1.5million on freehold is particularly raging.
“I can’t remember a market moving faster in that price range.”
He added: “The pandemic has clouded the seasons; we haven’t seen the massive surge in inventory hit the market, which would normally be the case after Easter. Summer can be calmer when families take a real break and get on a flight for the first time in two years.”
Gabriella Dickens, senior economist in the UK at Pantheon Macroeconomics, said: “We think house price growth will continue to slow from here on… It is true that households should use some of the savings they have built up during the pandemic. can spend. But consumer confidence is extremely weak.”