UK house prices rose for their second consecutive month in April, latest official figures show, amid hopes for a rebound in the housing market as the economy improves.
The average UK house price increased by 1.1 per cent in the 12 months to April, according to a provisional estimate from the Office for National Statistics (ONS).
This figure accelerated from 0.9 per cent annual growth in the year to March and marked the second month in a row with an annual increase, after eight straight months of declines.
Sentiment in the housing market has shown signs of improvement this year despite mortgage rate remaining elevated and the Bank of England continuing to hold interest rates at 5.25 per cent.
Separate data from the ONS this morning showed inflation returned to the government’s two per cent target in May for the first time since July 2021.
However, the central bank is still expected to wait until at least August to cut interest rates. Its next meeting is scheduled for Thursday.
The ONS said house prices rose by 0.6 per cent in England, 0.4 per cent in Wales and 4.5 per cent in Scotland in the year to April.
The data also showed that average UK private rents increased by 8.7 per cent in the 12 months to May, slowing from an 8.9 per cent increase in April – which came after a rise of 9.2 per cent in March.
In May, the average private rent in Britain was £1,262 per month, according to the ONS, with Kensington and Chelsea seeing the highest cost at £3,397. The lowest was in Dumfries and Galloway in Scotland at £480.
Struggling with high mortgage rates and affordability pressures, some landlords have either sold their properties to dodge rising mortgage payments – limiting the pool of supply – or passed high costs onto their tenants.
Matt Smith, a mortgage expert at property website Rightmove, said: “Hopefully today’s inflation drop is the first step on the journey towards lower mortgage rates in the second half of the year.
“Market expectations are still that the first Bank of England rate cut is more likely to be later in the summer rather than tomorrow, but at least today’s news will keep us on course rather than throwing a curveball.”