House prices fall again as mortgage rates spike

THE recent spike in fixed mortgage rates is starting to hurt the property market with house prices falling for the second month running in April, new figures show today.

- Jonathan Prynn

Leading high street lender Nationwide said the average cost of a home in the UK dipped 0.4% month on month to £261,962, following a 0.2% fall drop in March.

The annual rate of growth has come down from 1.6% in March to 0.6% in April.

Lenders, including in the past few days, NatWest, Santander and Nationwide, have been increasing their fixed rate offers as hopes of an early move from the Bank of England to cut the cost of borrowing have receded.

A slower than expected easing of the rate of inflation, continuing strong wages growth, and more "hawkish" comments from members of the Bank's rate setting Monetary Policy Committee (MPC) have pushed out the expected date of the Bank's first move.

Markets are now pricing in August as the most likely date for rates to start coming down from their current level of 5.25%.