2nd May 2023 12:48
(Alliance News) - Analysts are sceptical about whether April's rise in UK house prices is a sign of things to come.
Numbers from mortgage lender Nationwide on Tuesday showed "tentative signs of a recovery" for the market, which has cooled in recent months.
Nationwide said house prices rose 0.5% in April from March, halting seven consecutive months of decline.
The pace of decline in annual house prices also slowed to 2.7% in the month, compared to 3.1% annually in March.
"But with affordability still very stretched by historical standards and the economy likely to succumb to recession, we suspect that we are only partway through the correction," Capital Economics analyst Andrew Wishart commented.
With the average UK house price at GBP260,441, valuations are 4% below an August 2022 peak.
Nationwide analyst Robert Gardner pointed to "signs of a pick-up" in mortgage applications after a subdued start to the year which saw the number of mortgages approved for house purchases in February slide to nearly 40% below a year earlier.
Shares in London-listed housebuilders were among the best FTSE 100-listed performers.
Persimmon PLC jumped 7.2%, Barratt Developments PLC added 2.5% and Taylor Wimpey surged 1.9%.
Pantheon Macroeconomics analyst Samuel Tombs believes the UK housing market is not out of the woods, however.
"The small month-to-month increase in Nationwide's measure of house prices - the first since August - probably is just a blip away from its downward trend, rather than a sign of emerging stability in the market," Tombs said.
"Other timely evidence continues to point to an ongoing decline in house prices. For instance, Rightmove's unadjusted measure of asking prices rose by just 0.2% month-to-month in April, far less than average 1.2% increase for the time of the year."
The "trough" for UK house prices will not come "until towards the end of this year", Tombs predicted.
By Eric Cunha, Alliance News news editor
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