Keen buyers could be left choking in the dust of runaway house prices

Monthly house price growth slowed slightly to 12.1% in April – but it’s still the 11thconsecutive month in double digits. The average price hit £267,620, up £28,789 since last April. 38% of people are either moving or considering a move. This is even higher than this time last year. 24% want a larger property, but the number wanting outside space has dropped from 25% to 12%, and those wanting to leave urban areas has fallen from 28% to 15%. 17% wanted to move to cut their outgoings.

The Nationwide House Price Index for April was released today: House price growth slows in April but remains in double digits (

Sarah Coles, senior personal finance analyst, Hargreaves Lansdown: “Buyers clamouring for a new home risk being left choking in the dust of runaway house prices, as they post double-digit growth for the 11th consecutive month. We’re keener than ever to move house, and enthusiastic about trading up. Right now, we’re snapping up properties at lightning speed, but the higher prices rise, the more they risk leaving buyers behind.

We’re even more keen to move than we were this time last year, and demand is supporting higher prices. Much of what has driven price growth is still in place. Buyers remain worried that if they don’t crack on and buy soon, prices will rise even further out of reach; mortgages rates are rising, but remain reasonably low by historic standards; and the jobs market is flourishing, so we have the confidence to buy. There are also plenty of buyers who  still have some lockdown savings they want to put to good use.

However, headwinds are building, which will make it more and more difficult for people to stretch themselves – however keen they remain. Rising prices in themselves make it more difficult for people to afford the home they need, as almost a year of double-digit price rises has been accompanied by wage rises in low single figures.

Mortgage rates continue to rise, and have hit a five-year high (according to Moneyfacts). The market is pricing in another Bank of England rate rise next week – and a bigger one this time – which could push buyers to their limits.

And while the jobs market continues to flourish, wages are now falling behind inflation, which will feed into just how much people can afford to spend on a property.

The impact of rising prices will eventually take a toll too. Energy bill hikes this month will have come as a shock to the system, and at a time when taxes are rising and the cost of everything from food to petrol is making a bigger dent in our budgets, it makes heftier mortgages even more of a stretch. Even if we decide we can take these higher prices on the chin, mortgage companies may not agree. They’re increasing the assumed costs in their affordability calculations, which will make it harder to get a mortgage.

Lockdown savings have been vital in supporting the market. The more time that passes, the more people will find these savings eroded by higher prices. Our research shows that only one third of people haven’t spent any of their lockdown savings, and one in four have spent at least some of them on rising bills.

Gradually, more and more of these enthusiastic buyers will find they just can’t get the mortgage they need to buy the home they want, and we’re likely to see demand ebb, and price rises slow further as we go through the year.”