House prices fell again in April, Nationwide says

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HousesImage source, PA

UK house prices fell for the second month in a row during April, according to the Nationwide.

The building society said prices dropped 0.4% in April, and the annual rate of price growth slowed to 2.6%, the weakest pace for almost four years.

It said the slowdown may indicate that households were reacting to the "emerging squeeze on real incomes".

"Affordability pressures" in some parts of the country were also having an impact, Nationwide added.

"Various data suggest that the latest slowdown in house prices may be part of a broader trend," said Robert Gardner, Nationwide's chief economist, noting that retail sales growth had slowed "markedly" in recent months.

"Household budgets are coming under pressure, as wage growth has moderated and inflation has accelerated."

'Neutral gear'

However, Mr Gardner added that in some respects, the slowdown in price growth was "surprising".

"The unemployment rate is near to a 40-year low, confidence is still relatively high and mortgage rates have fallen to new all-time lows in recent months."

Last week, the Council of Mortgage Lenders (CML) said the UK's housing market was in "neutral gear", with a shift towards first-time buyer and remortgage customers, away from home movers and buy-to-let landlords.

Also last week, the latest figures from HM Revenue and Customs (HMRC) showed that the number of property sales remain static.

On a seasonally-adjusted basis, property transactions have generally been close to the 100,000 mark each month for the last three years.