Mortgage rates rise as house prices fall

2 min Read Published: 01 May 2024

Mortgage rates house price news articleFour of the UK's leading mortgage lenders have announced mortgage rate rises this week as market expectations on the speed and extent of interest rate cuts continue to cool. Halifax, Natwest, Nationwide and Santander have all pushed up the cost of their latest mortgage deals as the uncertainty over interest rate cuts continues. The news comes as Nationwide, the UK's biggest building society, announced a fall in average house prices of  0.4% in April.

Lenders increasing mortgage rates

As many as 20 lenders have increased mortgage rates this week across several fixed remortgage and purchase deals. Halifax announced an increase of 0.2 percentage points across the majority of its mortgage range from Thursday. This follows similar announcements from Natwest, Nationwide and Santander who have all announced increases across many of their mortgage products this week.

Mortgage data specialists Moneyfacts revealed this week that average two-year fixed deals are currently 5.91%, up from 5.80% at the start of April. The average five-year fixed deal has increased from 5.39% to 5.48%.

House prices falling

The latest house price data from Nationwide reveals a 0.4% fall over the month of April. The latest figures mean that the annual rate of house price growth has slowed to 0.6% for April, down from 1.6% recorded in March. Nationwide said that "The slowdown likely reflects ongoing affordability pressures, with longer-term interest rates rising in recent months, reversing the steep fall seen around the turn of the year. House prices are now around 4% below the all-time highs recorded in the summer of 2022, after taking account of seasonal effects".

Where next for house prices and mortgage rates?

The latest house price data from Nationwide is a useful barometer of where house prices are at, however, it is based on its own data and so doesn't reflect the housing market as a whole. The UK House Price Index is the most accurate of the various house price indices as its wide-ranging data is sourced from HM Land Registry and other government sources. However, while it gives a clear picture of the overall housing market, there is a lag in the data being published, meaning it is often two or three months behind the data being provided by the likes of Nationwide, Halifax and Rightmove. For the latest data from the major house price indices check out our regularly updated article 'What is going to happen to UK house prices?'.

Borrowers waiting for mortgage rates to come down may have to wait a little longer as expectations of a rate cut by the Bank of England have been pushed back. Where they had previously been predicted to start cutting interest rates ahead of the summer, the market is now pricing in a rate cut in September and if that does materialise, it is likely to be a smaller cut than previously predicted. For the latest interest rate predictions including the latest analysis on when interest rates are likely to be cut, read our article 'Are interest rates going to go down in 2024?'.

Those keen to lock in the best deal now can use our mortgage comparison tool or speak to a mortgage broker who can help you find the best deal on the market. If you do not have a mortgage broker, you can get a free mortgage review from a verified mortgage adviser in your area using Vouchedfor*. Simply fill in the form to get started.

Alternatively, contact Habito* an online broker that you can access regardless of your location - Habito's mortgage brokers will search deals from over 90 different mortgage lenders including deals that may only be available through an intermediary.



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