interactive investor comments on the latest ONS House Price Index.
- March 2022 saw UK house price growth slow to 9.8%, down from 11.3% in February
- The average UK house price was £278,000 in March 2022, which is £24,000 higher than this time last year.
Commenting, Myron Jobson, Senior Personal Finance Analyst, interactive investor, says: “A slowdown in house price growth could be a sign of things to come as the cost-of-living crisis bites. Those who have been priced out of the property market because of runaway house prices will hope the slowdown will ultimately lead to a fall in prices. When is anyone’s guess, but for the moment, house price growth remains strong amid robust demand and low supply.
“Low mortgage rates and higher wages helped offset house price growth in the not-so-distant past, but as property prices continue rise - albeit at a slower pace - and with mortgage rates also on the up, consumers are going to struggle to find a property they can comfortably afford.
“Mortgage affordability is becoming a growing thorn in prospective buyers’ side. Mortgage rates have climbed to levels we haven’t seen in a while and will continue to do so with further rises in interest rates on the horizon.
“Prospective homebuyers’ attempts to stretch their budgets to purchase a property is increasingly being thwarted by the cost-of-living crisis, with inflation surging to 9% in April and expected to reach double digits before the end of the year. Many first time buyers will have little option but to give up on their dream of homeownership for the time being. The rising cost of rent makes it harder to save for a first property. The average rent is now £995 a month after rising by 11% during the past year, according to recent research by Zoopla.”
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