UK housing market 'surprisingly resilient' despite higher mortgage rates

(Sharecast News) - House prices ticked higher in April, industry data showed on Monday, despite a spike in mortgage rates following the outbreak of war in the Middle East.

According to the latest house price index from Rightmove, prices rose 0.8%, only slightly below the long-term April average of 1.2% and taking the average asking price up to £373,971. This is despite the average two-year fixed mortgage rate now standing at 5.42%, compared to 4.25% before the US first attacked Iran at the end of February.

Stiff competition among sellers further supported prices, with the number of homes for sale at an 11-year high for the time of year.

The number of agreed sales was 3% lower than the same time last year, while new buyer demand was down 7% year-on-year. However, Rightmove said the market remained "surprisingly resilient" amid a spike in geopolitical tensions.

Rightmove's Colleen Babcock continued: "Some buyers will be feeling cautious due to the cost of living and mortgage rate increases.

"However, the latest data shows that, at least for now, home-movers are largely showing their usual resilience with their housing needs trumping other events.

"While higher mortgage rates negatively affect affordability, many buyers are also benefiting from rising wages, lower house prices and more flexible borrowing criteria, which all help affordability."

The index was based on 147,515 asking prices of properties put up for sale by estate agents between 8 March and 11 April and advertised on Rightmove.