According to new data released by Nationwide on Monday, UK house prices remained unchanged month-on-month in September but drastically fell 5.3% year-on-year. Closely followed by a 0.8% decline month-on-month in August, recording the fastest decline since 2009.
Following Nationwide’s monthly house price monitor, annual house price declines were seen in all regions during the third quarter.
The South West had the worst performance, with prices falling 6.3% from the previous year.
The terrain for affordability is still difficult. According to Robert Gardner, chief economist of Nationwide, a person with the typical first-time buyer’s wage would spend 38% of their take-home pay on their monthly mortgage payment, far more than the long-run average of 29%.
“With Bank Rate not expected to decline significantly in the years ahead, borrowing costs are unlikely to return to the historic lows seen in the aftermath of the pandemic,” he said.
“Instead, it appears more likely that a combination of solid income growth together with modestly lower house prices and mortgage rates will gradually improve affordability over time, with housing market activity remaining fairly subdued in the interim.”
Recent Bank of England data show that the forward-looking indicator of mortgage approvals fell by 8% in September compared to August, and lending is expected to remain weak.
“For now, first-time buyers and those remortgaging can take some comfort from more competitive mortgage deals as lenders compete aggressively for business,” personal finance analyst Alice Haine at BestInvest stated.
“Just remember some offers may be too good to be true, with lenders guilty of using attractive rates to mask sharp increases in arrangements or product fees. Calculating the overall cost of the product is vital in assessing whether one product is a better deal than another.”
To stretch their money further, buyers are now flocking to smaller, less expensive residences, with transaction volumes for flats holding up better than other property types, according to Nationwide.
Regardless of this, “the price underperformance has continued in the most recent quarterly data, with flats seeing the largest year-on-year fall (-5.7%), compared to -3.6% for detached, -4.6% for semi-detached, and -5.3% for terraced properties,” Gardiner conveyed.
- Published By Team Timeswire