Nerves abound in UK housing market as prices fall
1st June 2023 07:57
by Myron Jobson from interactive investor
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interactive investor comments on the latest Nationwide House Price Index.
Commenting, Myron Jobson, Senior Personal Finance Analyst, interactive investor, says: “The month-on-month increase in average house prices in April appears to have been a flash-in-the-pan moment, with prices returning to [their] downward trend in May. This is symptomatic of a hiccupping market that is adjusting to a comedown from the blistering pace of house price growth over the past few years.
“If topsy-turvy house prices haven’t made would-be buyers feel nervous about their prospects, recent changes in the mortgage marketplace might have. Concerns about how high interest rates will go to tackle stubborn and sticky inflation has seen the withdrawal of 7% of mortgage deals from the market since last week, as leaders reassess their propositions. Meanwhile, average rates on two- and five-year fixed deals have also risen, which is the last thing would-be buyers, who are pinching pennies to buy a property, need.
“While any fall in prices is good news for house hunters, it might not be enough to meaningfully offset the rising interest rate and its contribution to monthly mortgage payments. The stark reality is that owning a home appears to be a distant dream for many, with high mortgage rate rates, high property prices and a higher cost of living, including climbing rents, making buying a home an increasingly difficult prospect.”
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