Property market reeling from affordability blow
7th February 2023 08:07
by Myron Jobson from interactive investor
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interactive investor comments on the latest Halifax House Price Index.
Commenting, Myron Jobson, Senior Personal Finance Analyst, interactive investor, says: “The housing market is reeling from a major blow to affordability and home sales following the rise in mortgage rates to levels not seen since the financial crisis and the ongoing cost-of-living storm. Various house price indices suggest the decade-long house price growth party is seemingly coming to an end.
“While the average house price was down a smidge month-on-month, annual house price growth fell to its lowest level in three years. Halifax’s figures are slightly more positive than data published by Nationwide last earlier this month, which showed a 0.6% drop the price of the average property to £258,297 in January from £262,068. However, both house price indices offer further evidence of a slowdown in the property market.
“While housing affordability is becoming more stretched, the ongoing shortage of stock In the market has slowed the decline in price growth. Meanwhile, mortgage lenders have seemingly engaged in a mortgage ‘price war’ at the start of the year following a dip in demand for home loans. This, combined with growing confidence that an end is in sight for interest rate rises, could mean that house prices could remain stubbornly high for longer.
“Spring, typically a busy season for the UK's property market, will provide the real acid test for the robustness of house prices.”
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