House prices rose less than expected last month after expanding at the fastest rate for almost two decades.
The Nationwide says annual price growth fell to 12.1 per cent in April from 14.3 per cent in March, triggered by a very modest 0.3 per cent increase last month.
The April rise was the smallest in one month since September and was below many analysts’ expectations.
Nationwide says momentum is set to weaken as the cost of living crisis deepens and wages fail to keep pace with inflation.
There is widespread expectation that the Bank of England will raise interest rates to 1.0 per cent as soon as this Thursday, when its monetary policy committee next meets. If that happens, this will be the highest base rate since 2009.
Separately, a survey of around 3,000 people for Nationwide last month indicated a remarkable 38 per cent were either in the process of moving or considering a move.
Some 17 per cent of those moving or considering a move said they were doing so at least in part to reduce spending on housing, either by moving to a different area and/or by moving to a smaller property.
Nationwide chief economist Robert Gardner states: “We continue to expect the housing market to slow in the quarters ahead. The squeeze on household incomes is set to intensify with inflation expected to rise further, perhaps reaching double digits in the quarters ahead if global energy prices remain high.
“Moreover, assuming that labour market conditions remain strong, the Bank of England is likely to raise interest rates further, which will also exert a drag on the market if this feeds through to mortgage rates.”
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