The central bank kept rates on hold as it warned that the fight against inflation had hit a bump in the road

Home prices fell for a second straight month as mortgage lenders hiked interest rates, according to a closely watched survey.

Property values ​​fell 0.4pc between March and April, as the nationwide house price index showed below economists' forecasts for a 0.1pc gain.

The average house value was £261,962, up 0.6pc on the same month last year, a slowdown from the 1.6pc annual increase recorded in March.

Robert Gardner, National's chief economist, said: „The slowdown reflects ongoing affordability pressures, with long-term interest rates rising in recent months, reversing the steep decline seen earlier in the year.

„After accounting for seasonal effects, house prices are now 4 percent below their all-time high recorded in the summer of 2022.”

According to analyst Manifacts, lenders have kept borrowing costs down, with the number of mortgages over 6pc up 10pc since the start of last month.

Major lenders including TSB, Halifax and HSBC have increased prices on their selection of mortgages over the past two weeks as swap rates, the key pricing mechanism for home loans, continue to rise.

Mr Gardner added:

Recent research by Censuswide on behalf of Nationwide found that almost half (49pc) of prospective first-time buyers (those intending to buy in the next five years) have delayed their plans in the past year.

Among this group, the most commonly cited reason for delaying their purchase was that house prices were too high (53pc), while 41pc said high mortgage costs prevented them from buying.

Coupled with this, 84% of prospective first-time buyers say the cost of living has affected their plans to buy, for example by having less money to save for a deposit each month.

Two-thirds (67pc) of respondents currently have between £0 and £10,000 saved as a deposit.

With a typical first-time buyer currently holding a 10pc deposit on a property of around £22,000, it is not surprising to find that c.60pc of prospective buyers have yet to save more than a quarter of their target deposit.

Interestingly, 55 percent of respondents said they would be willing to buy in another part of the country where home prices are lower or where they can afford a larger property. Inevitably, there is a lot of variation in how far people are willing to move, but half said they would move more than 30 miles from their current location.

Buying a property in a less expensive area seems to be a common compromise that prospective buyers make. A third (32 per cent) said they would consider a smaller property than they would like, while 28 per cent would go for a property that needs work.

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