As the pace of house price growth picked up in April, the trends showed a gradual cooling of the market, while market demand had been supported by movers, this too began to wane.
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Despite the cooling of the market, Nationwide indicated that the current economic climate showed a house price crash was unlikely. With a monthly rise from March to April from 0.50 per cent to 0.90 per cent, an annual change from 9.30 per cent to 10.20 per cent, the average house price rose slightly from £177,083 to £180,314.
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Fionnuala Earley, Nationwide’s chief economist, said: “The Bank of England held off raising rates at the beginning of April, but the acceleration in house prices during the month makes a rate rise on the Monetary Policy Committee’s 10th anniversary look like a certainty. The pace of house price growth almost doubled during April to 0.90 per cent, up from 0.50 per cent in March. This brings the annual rate of inflation back into double digits at 10.20 per cent and the price of a typical house up to £180,314, which is £16,741 higher than at this time last year.”
David Stubbs, senior economist at the Royal Institute of Chartered Surveyors, said: “It is clear that the market has absorbed the interest rate hikes, but the slowdown in price growth has started. With rates heading higher, both activity and price gains will start to drop off at a quicker pace as the year progresses.”
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