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According to stats from the Nationwide Building Society, house prices rose at their slowest annual rate for five years, due in part to a sustained period of economic uncertainty.
House prices rose by just 1.6% in October and the number of transactions were still 30% lower than the levels seen pre-recession in 2007. According to Nationwide, annual house price growth is the lowest since May 2013 – and it continues to flat line.
The average home has been valued at £214,534. In January 2018 it was £211,756 and in October 2017 it was £211,085.
The chief economist at Nationwide said the housing market has been impacted by a squeeze in household budgets, and wages not rising fast enough to outstrip inflation. What’s more, those who are already in properties were unable to move on to another property because they simply could not afford the funding gap.
Other things, such as recent tax changes to second home owners, had also removed a large segment of the market, bringing a cut to the number of properties being purchased as investment properties to rent out.
By contrast, the number of first-time-buyers in the market has recovered – and the number of cash buyers also remains consistent. It is thought that the number of cash buyers were less impacted by the tightening in credit conditions, as well as the deterioration in the labour market conditions which made it more difficult for people to secure a mortgage. Recent years have seen a recovery in the first-time-buyer mark, thanks in part to the introduction of new schemes such as Help-to-Buy.
Experts have said they do not see house prices moving sharply in the near future. Mortgage rates are only rising gradually and unemployment is low. However, consumer confidence is very low. Uncertainty about Brexit is no doubt having an effect on housing demand and that will keep prices low.
If you would like any legal advice relating to a property purchase, contact Downs Solicitors to see how we can help.