UK house prices rose for the fourth consecutive month in April, jumping at the fastest annual pace in 11 months and defying expectations of a slowdown caused by the Middle East conflict, according to Nationwide.
Annual Growth Accelerates
The UK's biggest building society reported that house prices unexpectedly increased by 3% year-on-year in April, up from 2.2% in March. The typical UK property is now worth £278,880. On a monthly basis, prices rose by 0.4% in April following a 0.9% increase in March, while city economists had forecast a 0.3% monthly decline.
On a three-month basis, which smooths out monthly volatility, prices rose to 1.2% from 0.7% in the previous quarter, the highest growth since February 2025.
Market Resilience Amid Uncertainty
Robert Gardner, Nationwide's chief economist, said: "Despite the uncertainty caused by developments in the Middle East and the subsequent rise in energy prices, the UK housing market has continued to regain momentum following the slowdown recorded around the turn of the year."
Gardner noted that the price rises were "somewhat surprising" given that consumer confidence indicators had "weakened noticeably." Recent surveys, including GfK's barometer, showed UK consumer confidence slid in April to its lowest level since October 2023, as households brace for a potential cost of living shock from the Iran war.
A survey of estate agents also revealed that new buyer inquiries and sales fell sharply in March, with near-term sales expectations becoming significantly more pessimistic.
Support from Household Finances
Despite lenders withdrawing mortgage products and raising rates since the conflict began, Nationwide's data suggests homebuyers have been less affected than feared. The Bank of England kept interest rates on hold but warned that rates may need to rise if energy costs stay high.
"The market is likely being supported by the relative strength of household finances," Gardner said. "In aggregate, household debt is at its lowest level relative to income for around two decades, and sizeable savings buffers have been built up in recent years."
Skepticism About Sustainability
Economists expressed doubt that the growth would last. Rob Wood, chief economist at Pantheon Macroeconomics, said: "Unfortunately, we doubt prices can keep up their recent pace. Potentially, some of the prices included in the Nationwide index were from sales agreed in the early stages of the Iran war. The Nationwide measures prices at the mortgage approvals stage, partway through the purchase timeline."
Renters' Rights Act Becomes Law
The price rise coincides with the enactment of the Renters' Rights Act, which aims to give renters more security. The new law bans no-fault evictions, limits rent rises to once a year and only up to "the market rate," and stops landlords from accepting offers over the asking price. Tenants also gain the legal right to request a pet, which landlords cannot unreasonably refuse.
