The small increase in UK house prices in April<\/a> has left them broadly flat since the turn of the year, says Peter<\/strong> Arnold<\/strong>, EY<\/strong> UK<\/strong> chief economist:<\/p>\n The stabilisation in market conditions reflects the large fall in mortgage rates since last summer, with transactions and prices appearing to have passed their trough.<\/p>\n However, the recent rise in mortgage rates is likely to dampen the recovery in the short-term. And looking ahead, the recovery in prices is unlikely to be rapid given that poor affordability continues to significantly limit the pool of potential buyers and mortgage rates are only likely to fall back slowly.<\/p>\n As the prospect of the first rate cut since March 2020 drifts further into the distance, borrowing costs have edged higher and budgets have been squeezed.<\/p>\n A short-lived burst of positivity in the early weeks of this year led to higher supply, increasing downwards pressure on prices. A wave of homeowners currently rolling off sub-2% mortgages is adding to the financial pressures in the system. As a summer rate cut moves onto the horizon, we expect UK house prices to respond and rise by 3% in 2024.\u201d<\/p>\n \u201cBorrowers have benefited from cheaper mortgage rates since the start of the year, which has boosted market activity and enquiries.<\/p>\n \u201cSince then, higher funding costs have led to higher mortgage rates over the past couple of weeks and there is likely to be some volatility in pricing ahead. Borrowers would be wise to secure a rate they like the look of to protect themselves from further price fluctuations in the short term.<\/p>\n \u201cHouse prices are yo-yoing as buyers and sellers negotiate their way through the uncertain economy, with a small monthly rise in April.<\/p>\n \u201cConsumers are expecting a fall in interest rates at some point this year. But with lenders increasing rates in the last few weeks, buyers have understandable hesitancy over the right price to offer, while sellers are trying to navigate how offers align with their expectations.<\/p>\n It looks like mortgage rates will continue to remain elevated with the Bank of England poised to keep interest rates at 16-year highs of 5.25% this Thursday.<\/p>\n Financial markets have been pushing back their forecasts for the timing of the first rate hike this year, with August currently pencilled into the diary, although that could certainly change depending on the data.\u201d<\/p>\n
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Leader of major cybercrime group has been unmasked and sanctioned by the UK, US and Australia, authorities say