House prices fell in April as potential buyers continued to face pressure on affordability, according to the Nationwide.
The UK’s biggest building society said that UK house prices were down by 0.4% compared with the previous month.
It said the average home cost £261,962, some 4% below the peak in the summer of 2022.
The rising cost of borrowing was key to the latest fall in prices, it said.
Mortgage strain
The figures come after a string of lenders raised rates on new fixed rate mortgage deals in recent days.
These were prompted by expectations of fewer and slower interest rate cuts by the Bank of England.
The Halifax is the latest lender to announce higher rates, with a plan to put up the cost of much of its mortgage range by 0.2 percentage points on Thursday.
The interest rate on a fixed mortgage does not change until the deal expires, usually after two or five years, and a new one is chosen to replace it. Doing nothing would leave people on a variable rate, which is very expensive.
About 1.6 million existing borrowers have relatively cheap fixed-rate deals expiring this year.
The Nationwide said that potential first-time buyers were being put off their plans owing to high house prices and the high cost of borrowing.
Earlier in the week, the Halifax, which is part of Lloyds Banking Group, said demand for smaller homes such as flats had been increasing at a faster rate than bigger properties, owing to the squeeze on affordability.
It said there had been a switch in demand, reversing the “race for space” that was seen during the Covid pandemic when buyers searched for bigger homes.
