Nationwide, a mortgage lender, announced that home prices in the United Kingdom rose less than expected in April 2022, following the largest increase in 18 years in March.
According to the report, home prices rose 12.1% year-over-year in April. This was down from a 14.3% increase in March after a 0.3% month-over-month increase. This is the smallest monthly increase since September.
Nationwide notes that prices have been driven by a strong labor market. However, they are expected to fall this year due to a reduced ability to buy a home. And real incomes fell as inflation rose faster than incomes.
Nationwide chief economist Robert Gardner said in a statement, “We continue to expect the housing market to slow down in the coming quarters. Moreover, if conditions in the labor market remain strong, the Bank of England (BoE) is likely to raise interest rates further. This would have a negative effect on the market if mortgage interest rates rose.”
Economists expect the BoE to raise rates to 1% on May 5, the highest level since 2009, and money markets expect rates to rise to 2.25% by the end of the year.