‘Mortgage affordability a growing hurdle for many’
7th March 2022 10:45
by Myron Jobson from interactive investor
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interactive investor comments on the latest Halifax price index.
- Average house price reaches record high of £278,123, according to the latest Halifax House Price.
- Monthly house price growth rose to +0.5%, following a slower start to the year.
- Annual rate of growth at +10.8% is the strongest level since June 2007 (+11.9%).
Commenting, Myron Jobson, Senior Personal Finance Analyst, interactive investor, says: “House prices continue to defy expectations almost half a year after the stamp duty holiday afterburners came off. While another recent study of house prices showed that housing inventory has started to recover, demand still outpaces supply - fuelling further rises in the price of property.
“Mortgage affordability has become a growing hurdle. For many first-time buyers, the escalating cost of living crisis adds further pressure on budgets, which have already been cut to the bare bone to help fund a property purchase.
“While mortgage rates remain low by historical standards, buyers have to save bigger deposits than they did pre-pandemic, as UK house price growth has significantly outpaced the rise in average earnings in recent history. With the ‘Bank of Mum and Dad’ also counting its pennies amid the cost of living crisis, a lack of affordable housing has priced many out of the market.
“The prospect of further interest rate rises in 2022, and the ongoing cost-of-living squeeze, means the mountain that wannabe homeowners have to climb to get on to the property ladder is getting steeper.”
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