According to Nationwide Building Society the costs of homes decreased last month despite economists predictions.
The data shows the average price of a home in England was £271,079 in August, which is a reduction of 0.1% compared with July. What’s more, the figures outline the annual rate of house price growth slowed to 2.1% in August, from 2.4% in July.
News of the reduction has come as quite a shock after a poll by Reuters revealed analysts forecast a 0.2% monthly rise in house prices and a 2.8% annual increase.
‘House prices are still high compared with household incomes, making raising a deposit challenging for prospective buyers, especially given the intense cost of living pressures in recent years,’ Robert Gardner, chief economist at Nationwide, said.
‘Combined with the fact that mortgage costs are more than three times the levels prevailing in the wake of the pandemic, this means that the cost of servicing a mortgage is also a barrier for many.’
However, Gardner added that ‘affordability could continue to improve gradually if income growth continues to outpace house price growth as we expect.
‘Borrowing costs are likely to moderate a little further if bank rate is lowered again in the coming quarters. This should support buyer demand, especially since household balance sheets are strong and labour market conditions are expected to remain solid.’
Last month the Bank of England cut interest rates by 0.25% in a bid to help individuals struggling with current mortgage payments or getting on the property ladder.
Against this backdrop, yesterday (1st September) HSBC UK became the latest lender to announce a bigger loan-to-income (LTI) multiple cap of up to 5.5 times salary for first-time buyers. Previously the cap was held at 4.49 LTI.
Photo by Olah Renáta Adrienn via UnSplash
In related news:
Leave a Reply