Housing market sees noticeable downturn

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The combination of rising rents, high inflation rates, and the challenge of saving for a deposit continues to hinder prospective buyers

PROPERTY MARKET: While uncertainties loom, estate agents and financial experts believe a relatively soft landing is still possible

According to Robert Gardner, the chief economist at Nationwide, longer-term interest rates, which form the basis for mortgage pricing, have experienced a significant rise in recent months. This increase is a response to data indicating that the underlying inflation in the UK economy is not decreasing as rapidly as anticipated.

Nationwide reveals that a 10 per cent deposit on a typical first-time buyer home amounts to around 55 per cent of gross annual income. Although this has decreased from the previous high of 59 per cent in late 2022, it remains slightly above pre-financial crisis levels in 2007/2008. According to him, for individuals coming off two-year fixed-rate mortgage deals, securing a new two-year deal may lead to an increase of £385 per month for the average borrower. Those transitioning from five-year deals could face an increase of around £315 per month. Lenders aim to assist borrowers wherever possible during this challenging period.

 

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