1 September 2022
If you are covering the Nationwide House Price Index, please see the following comment from Karen Noye, mortgage expert at Quilter:
"As the weather cools so will the housing market and today’s Nationwide house price Index is starting to show this. The increase in household costs coupled with interest rates rising will cause people to think twice about moving and we are already seeing the housing market lose momentum.
"At present, the slowdown remains relatively modest with annual UK house price growth slowing to 10% in August, from 11% in July but is likely to be much more pronounced later this year after a couple of months of cold weather and further likely interest rate rises from the Bank of England.
"According to the Nationwide data, in just two years house prices have on average risen £50,000. This is a phenomenal rise and while this represents a positive for home movers, first time buyers who already had the cards stacked against them face an even more difficult route to homeownership.
"First-time buyers face ever-increasing house prices, inflation rapidly eating away at their deposits, and the rising cost of living disrupting their ability to save, all in conjunction with successive interest rate hikes. A slowdown in house prices would at least represent a positive for this group.
"Even government schemes such as the 95% scheme have failed to provide enough help to make any real difference to the quantity of first-time buyers with the uptake remaining low. Recent figures show that the number of mortgages completed with the help of the government’s mortgage guarantee scheme is relatively low, with just 17,996 mortgages completed between April 2021 and March 2022.
"The likely winner of the current Conservative leadership contest, Liz Truss, has raised the issue in her campaign and pledged to help “generation rent” with an upcoming review which would look at allowing rent payments to be used as part of the affordability assessment for a mortgage. Although every little helps this may well add more complexity for landlords and not go to the root of the problem which is that first time buyers are struggling to raise enough money for the deposit.
"The winter is likely to bring a whole host of problems to the UK and while the housing market weathered the pandemic very well, this next test may start cause a stagnation of house prices if not a drop."
