Nationwide’s latest house price index showed annual growth rose to 3.0% in April, up from 2.2% in March.
Prices increased by 0.4% month on month, after seasonal adjustment, taking the average UK house price to £278,880 on a non-seasonally adjusted basis. This compared with £277,186 in March.
The lender said the figures suggested the market had continued to regain momentum following the slowdown seen around the turn of the year.
Robert Gardner, chief economist at Nationwide, said: “UK annual house price growth picked up to 3.0% in April, from 2.2% in March. Prices increased by 0.4% month on month, after taking account of seasonal effects.
“Despite the uncertainty caused by developments in the Middle East and the subsequent rise in energy prices, the UK housing market has continued to regain momentum following the slowdown recorded around the turn of the year.
“This is somewhat surprising given that indicators of consumer confidence have weakened noticeably. GfK’s headline index has fallen to its lowest level since late-2023, reflecting households’ more pessimistic views of the economic outlook and their own financial position over the year ahead.”
Gardner said housing market sentiment had also weakened, with the Royal Institution of Chartered Surveyors reporting a sharp fall in new buyer enquiries in March, taking the index to its weakest level since 2023.
He said: “This softening is likely to have been influenced by higher market interest rates following the onset of the conflict, alongside a more uncertain backdrop.
“The market is likely being supported by the relative strength of household finances. In aggregate, household debt is at its lowest level relative to income for around two decades, and sizeable savings buffers have been built up in recent years, although these have not been evenly distributed across households.”
Nationwide said the outlook would depend on the duration of the energy price shock and the policy response, with UK economic growth likely to be weaker and inflation higher than previously expected.
Gardner said: “However, the UK economy and housing market have proved remarkably resilient in recent years. This provides some confidence that, if the latest shock passes relatively quickly, and energy prices normalise in the quarters ahead, any near-term softening in the housing market will also prove short lived.
“Moreover, housing affordability had been improving steadily in recent years due to a combination of income growth outpacing house price growth by a wide margin and a modest decline in mortgage rates.
“While market interest rates have risen in recent months, the impact on affordability has so far been limited. Indeed, swap rates, which underpin fixed-rate mortgage pricing, remain well below the highs reached in 2023 and are broadly in line with levels prevailing in late-2024, implying only a partial reversal of earlier gains.”
