UK house prices declined for the second consecutive month in April, influenced by uncertainties around interest rates and rising mortgage costs, which impact the traditional spring homebuying season. According to the Nationwide Building Society, April's average house price fell by 0.4% to £261,962, following a 0.2% drop in March. This reduction marks a decrease of £11,700 since August 2022.

Nationwide's index showed that annual house price growth slowed to 0.6% in April from 1.6% in March. This trend has placed additional pressure on the Bank of England ahead of next week's interest rate announcement. Last week, major banks such as Barclays, HSBC, and NatWest raised their fixed mortgage rates, and Nationwide increased some rates by up to 0.25 percentage points on Tuesday. The average new two-year fixed mortgage rate has risen to 5.91%.

Despite the expectation of a bank interest rate cut later this year, possibly as early as June but more likely around August or September, the housing market has shown signs of cooling. Mortgage approvals, however, reached a peak in March, reaching a high not seen since September 2022.

A Nationwide survey revealed that 49% of prospective first-time buyers have postponed their purchasing plans in the past year due to high house prices and increased mortgage costs. Additionally, 53% cited high house prices as a deterrent, while 41% were hindered by rising mortgage expenses. Despite these challenges, 55% of respondents were open to buying in less expensive regions to afford a bigger home.

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